Cinven to acquire GNFT

Cinven has agreed to acquire Gas Natural Fenosa Telecomunicaciones. GNFT is a neutral telecom operator providing fibre infrastructure and transmission services to telecom operators in Spain and Latin America leveraging the infrastructure of utility networks.

PRESS RELEASE

European private equity firm Cinven today announces it has agreed to acquire Gas Natural Fenosa Telecomunicaciones (‘GNFT’ or ‘the Company’), the fibre network operator in Spain and Latin America, from Gas Natural Fenosa (‘GNF’) for a total consideration of €510 million.

GNFT is a neutral telecom operator providing fibre infrastructure and transmission services to telecom operators in Spain and Latin America leveraging the infrastructure of utility networks. GNFT will continue providing GNF’s telecommunication services to GNF.

Cinven’s TMT and Spanish teams regard GNFT as an attractive investment on the basis of:

• GNFT’s unique network with capillary presence in the main metropolitan areas of Spain and Latin American countries in which it operates;
• Its consistent organic growth track record; double digit organic growth with third party customers over 2011-2013 and successful new market penetration;
• Structural growth in data traffic and fibre networks deployments in both Spain and Latin America driven by increased usage and penetration of fixed and mobile broadband;
• Stable and strong cash flow generation in Spain and;
• Significant growth opportunity in Latin America as markets are developing and fibre connectivity and capacity demand is increasing fast.

The Company has generated strong financial performance with a 13% EBITDA increase CAGR between 2011 and 2013.

The management will be led by Iňigo García del Cerro, who will continue in his role as Managing Director of GNFT.

Jorge Quemada, Partner at Cinven, said:

“GNFT is a well invested fibre business in Spain with strong cash flow generation. The Company also has exposure to high growth markets in Central and South America. GNFT has an excellent management team with a significant track record in the telecom industry with a combined 86 years in the sector and we look forward to working with them.

“Our TMT and Spanish teams have worked closely together to identify the investment opportunity in GNFT. We have invested successfully in telecom businesses such as Ziggo in the Netherlands and Numericable in France in the past and believe this will considerably benefit the growth of GNFT. ”

Thomas Railhac, Principal at Cinven, added:

“The principal growth drivers for broadband globally are cloud computing, high speed fixed and mobile access and data explosion. These are driving increased demands for broadband capacity and, as a result, greater investment in fibre optic networks. Neutral carriers, like GNFT, are well positioned to capitalise on this explosion in capacity demand. We also believe there is considerable potential for GNFT as an independent business under our ownership given its strong business fundamentals”

GNFT represents the ninth investment from Cinven’s Fifth Fund.

- Ends -

For more information, please contact our advisors:

Cinven Partners LLP
Vanessa Maydon Tel. + 44 (0) 207 661 3325 / + 44 (0)7802 961 902
Email. vanessa.maydon@cinven.com

FTI Consulting
Edward Bridges Tel. + 44 (0) 207 269 7147 / + 44 (0)7768 216 607
Email. edward.bridges@fticonsulting.com

Notes to editors

• Cinven is a leading European private equity firm focused on building world-class Europe-focused companies.
• Its funds invest in six key sectors: Business Services, Financial Services, Healthcare, Industrials, Consumer and Technology Media and Telecommunications (TMT).
• Cinven funds acquire companies with significant operations in Europe that require an equity investment of €100 million or more.
• Its European focus and expertise are complemented by an ability to capitalise on global growth opportunities through its Asian office.
• In the TMT sector, Cinven’s investments have included:
- Visma AS, a leading software and business process outsourcing service in the Nordic region;
- Host Europe, a supplier of hosting and domain services across Europe;
- CPA Global, a market leading business providing software and services for patent renewal and other Intellectual Property management.
• In particular, Cinven has invested in the European telecom sector, in:
- Numericable, a French cable operator. The investment generated a 4.5x money multiple on Cinven’s original investment and a €1.6 billion capital gain following the IPO of Numericable (Nov 2013) and the announced acquisition of SFR
- Ziggo, the Dutch cable operator. The investment generated a 2.8x money multiple on Cinven’s original investment and total proceeds of €1.7 billion following the successful IPO of Ziggo (March 2012) and the sale of Cinven’s remaining stake (April 2013)
• Cinven’s recent investments across all sectors include:
- Visma AS, a leading software and business process outsourcing service in the Nordic region (April 2014)
- Heidelberger Leben, a specialist provider of retirement and life insurance products in Germany (March 2014)
- Medpace, a leading contract research organisation (Feb 2014)
- CeramTec, a global manufacturer of high performance ceramics for application in medical, automotive and industrial end-markets (Sept 2013)
- Host Europe, a supplier of hosting and domain services across Europe (Aug 2013).

• Cinven has offices in Guernsey, London, Paris, Frankfurt, Milan, Luxembourg, and Hong Kong. Cinven Limited and Cinven Capital Management (V) General Partner Limited are authorised and regulated by the GFSC. “Cinven” means, depending on the context, any of or collectively, Cinven Group Limited, Cinven Partners LLP, Cinven (LuxCo 1) S.A., Cinven Capital Management (V) General Partner Limited and their respective Associates (as defined by the Companies Act 2006) and/or the funds managed or advised by the Group.

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