Information on the target
Oakley Capital Investments Limited (OCI) has announced that Oakley Capital Origin II has agreed to acquire vitroconnect, a leading broadband open access platform business based in Germany. This acquisition marks the first platform investment made by Origin II. OCI's indirect contribution to this investment is anticipated to be up to £19 million, reflecting OCI's share of Oakley’s overall investment in vitroconnect. The transaction is expected to complete around the end of H1 2024, pending regulatory approval.
Founded in Gütersloh, Germany, vitroconnect specializes in connecting broadband providers with resellers through its proprietary software platform. The company collaborates with many of Germany's leading telecommunications players, offering a range of services including process automation, network operations, brokerage, and white-label solutions through its Carrier Aggregation Platform (CAP). This innovative platform enables customers to utilize broadband networks more efficiently while significantly reducing transaction costs.
Industry overview in the target’s specific country
The German broadband market is characterized by its fragmentation and technological diversity, presenting both challenges and opportunities for growth. Currently, Germany has one of the lowest rates of homes connected to fiber broadband in Europe, which has led to a surge in investments aimed at enhancing fiber technology infrastructure. As the country seeks to catch up with its European counterparts, the number of homes connected to fiber is projected to increase dramatically, from three million today to an estimated 29 million by 2029 and 39 million by 2035.
This significant growth in fiber connectivity is expected to drive demand for innovative solutions in the broadband sector. Companies like vitroconnect are well-positioned to capitalize on this trend, as they provide essential services that facilitate the efficient operation of broadband networks. The ongoing shift towards fiber to the home (FTTH) technology is anticipated to transform the competitive landscape, creating opportunities for companies that can effectively navigate this transition.
Moreover, the German government has recognized the importance of advancing broadband infrastructure and has implemented various initiatives to encourage investment in fiber technology. This supportive regulatory environment, combined with the increasing consumer demand for high-speed internet, is likely to propel the market forward, making it an attractive space for private equity investments.
The rationale behind the deal The acquisition of vitroconnect aligns with Oakley Capital's strategy of investing in high-growth, founder-led businesses within the technology and telecommunications sectors. By partnering with vitroconnect's founder and CEO Dirk Pasternack, Oakley aims t…