Warburg Pincus invests in Poland’s Inea, plans major FTTH network build

Private equity group Warburg Pincus has, via an affiliate, become a strategic minority investor in Polish cable operator Inea and plans to provide funding for a major fibre-to-the-home-based network expansion.

Warburg Pincus said it believed the deal is the largest private equity investment in Poland so far this year.

The funding will be used to support an expansion of the operator’s next-generation network, which provides bundled services to customers across the regions in which Inea is active. Specifically, Warburg Pincus will support Inea’s rollout of a FTTH-based network to bring high-speed broadband access to over 200,000 additional households and a significant number of businesses in its home territory of the Wielkopolska region in western-central Poland.

Part of the investment will be devoted to funding Wielkopolska Sieć Szerokopasmowa, a partnership with the local government which will construct over 4,000 km of  fibre optic backbone and distribution network, putting 95% of Wielkopolskie households within a 4km radius of the closest distribution node.

According to Warburg Pincus the network, once completed, will be the most advanced in Poland, providing high-speed broadband access to over 500,000 homes across the region.

Warburg Pincus has committed to additional funding to support growth and consolidation. Terms of the funding were not disclosed.

“Warburg Pincus is a very experienced and successful investor who fully supports the project to construct the next
generation Access network in the Wielkopolska Region,” said Janusz Kosinski, president of the management board and co-founder of Inea. “Since we engaged in the project to construct a NGA network we have been looking for a partner who would allow us to complete this project on as large a scale as possible. The involvement of Warburg Pincus will help ensure the success of this project which will lead to all inhabitants throughout the Wielkopolska Region benefitting from access to next generation broadband telecommunication services.  In addition, with the support of Warburg Pincus, we will have more opportunities to grow our business further.”

Paul Best, a Warburg Pincus managing director, said: “As experienced investors in the cable sector, Warburg Pincus has identified Inea as a truly exceptional operator. The Polish TV and broadband markets benefit from long term structural growth and cable has a significant advantage over other technologies.  We were attracted to INEA due to its strong market position and the potential for further growth and industry consolidation. In addition, we have found an exceptionally talented management team who are dedicated to the expansion of their business.  We look forward to supporting them as active partners with a long term value creation agenda.”

Inea currently passes 360,000 homes and serves 170,000 subscribers. The company is the country’s fourth largest cable operator.