3i Infrastructure agrees to acquire DNS:NET – 3i Infrastructure plc has agreed to invest c.€182m to acquire a 60% stake in DNS:NET and to provide additional funding for the future growth of the business. DNS:NET is a leading independent telecommunications provider in Germany. 3i Infrastructure is buying its stake from Deutsche Beteiligungs AG (“DBAG”), DBAG ECF, a private equity fund managed by DBAG, and founder and CEO Alexander Lucke, with the latter reinvesting alongside 3i Infrastructure to retain a 40% stake. Completion is expected to take place in June 2021.
Established in 1998, DNS:NET owns the largest independent fibre-to-the-cabinet network in the Berlin area, as well as three data centres. The company is said to differentiate itself through a superior network, local brand recognition and attractive pricing of high bandwidth products, which drives high customer satisfaction. In recent years, DNS:NET has commenced a fibre-to-the-home (“FTTH”) rollout which it now plans to accelerate with 3i Infrastructure’s backing. It plans a significant investment in fibre infrastructure to bring internet at Gigabit speed, starting in the Berlin/Brandenburg area and Saxony-Anhalt.
Fibre is superior to other broadband access technologies because it provides reliable low latency, high bandwidth and distance-independent connectivity for both download and upload. Demand for FTTH connectivity is forecast to grow rapidly, as consumers normalise data intensive activities such as cloud-based remote working, high definition streaming and online gaming, and increasingly view high speed broadband as an essential service. Germany lags behind most European countries in its FTTH deployment, with only 14% coverage today compared to the European average of 33%. [This surprised us. The latest UK stat we could find was from Ofcom: 18% in the UK as a whole, with 56% in Northern Ireland] The market is projected to grow at 30% p.a. to meet the German government’s objective of every one of its 43 million households having access to gigabit speed broadband by 2025.
3IN : 3i Infrastructure agrees to acquire DNS:NET