MEIF5 makes first telecoms investment with Polish purchase

The Macquarie fund buys Warburg Pincus’s 72% stake in Inea, which owns the largest regional fibre network in the country.

Macquarie’s fifth European infrastructure fund has agreed its first deal in the telecoms and broadband sector with the acquisition of Polish group Inea.

MEIF5 has bought private equity group Warburg Pincus’s 72 percent stake in the telco operator, as well as minority shares from Inea’s founder and co-shareholders. The parties declined to disclose the terms of the deal.

Inea owns a 7,000km regional fibre network in Poland, the largest of its kind in the country. In addition to its fibre and telecoms services, the company also acts as a cable TV operator in its main hub in western Poland.

Warburg Pincus initially acquired a minority stake in Inea in 2013 before subsequently boosting its position. The New York-headquartered firm said Inea’s EBITDA had doubled in its four years of ownership and in June, Inea announced a 500 million-zloty ($141 million; €118.9 million) investment programme to build nearly 160,000 fibre-optic connections.

Leigh Harrison, MIRA’s European head, said there remains “considerable potential to expand the business” following the acquisition. Inea’s 11 percent market share of fibre to home networks makes it the second largest operator in the country behind Orange, according to a recent report by Polish communications state body UKE. The market remains heavily fragmented, with 63.7 percent of the fibre networks owned by operators with a market share of less than 1.9 percent.

MEIF5 has joined Infracapital and Alinda as institutional investors operating in the Polish telecoms industry. The former began a joint venture with Nokia earlier this year to build and operate a fibre broadband network, while Alinda has owned Emitel since 2013 – the largest mobile tower operator in Poland.

The Inea acquisition is MEIF5’s sixth investment following deals for EP Infrastructure, Empark, Race Bank offshore wind farm, the Green Investment Group and CLH. It is the first time Macquarie’s European platform has invested in Poland, although its Global Infrastructure Fund II has owned deep-water container terminal DCT Gdansk since 2005.