Livingstone completes its fifth transaction for vitronet

Livingstone’s Media & Technology sector team has advised the management of vitronet Projekte GmbH, a specialist manufacturer of broadband networks in the telecommunications industry, on its management buy-out backed by Deutsche Beteiligungs AG’s Expansion Capital Fund (ECF). The transaction is scheduled to close in May 2017, under the condition of the agreement of the German antitrust authorities. The terms of this transaction have not been disclosed.

virtonet Projekte was founded in 2001, currently employs approx. 100 employees and focuses on the construction of broadband and fiber optic networks. In addition to the planning, project management and ongoing service of telecommunication networks, its service portfolio also includes the construction of physical networks in cooperation with subcontractors. The Company specialises in the construction of new (FTTx) optical fiber networks as well as the technical upgrade of existing networks, and works with utility companies and municipalities across Germany. For the current fiscal year 2017, vitronet Projekte expects revenues of approx. €36 mil. on the basis of the current order backlog.

“We expect strong growth in the coming years and therefore want to focus more strongly on developing our internal processes and structures to provide sophisticated telecommunication services to our customers,” said Thomas Simon, CEO of vitronet Projekte GmbH, and added: “In DBAG we have an experienced partner who is able to support us in that.”

The listed Deutsche Beteiligungs AG launches closed private equity funds and invests alongside the funds in well-positioned medium-sized companies with high development potential. After expanding its investment criteria for the DBAG ECF last year, the fund also selectively provides capital for MBOs. The fund’s equity capital investments range from 10 to 30 million euros. The portfolio of DBAG includes DNS:net and inexio, two telecommunications companies that build and operate fiber optic networks in rural areas and provide high-speed internet connections there. With the acquisition of vitronet Projekte, DBAG strengthens its position in the telecommunications sector, in order to profit from the growing broadband expansion within Germany.

“vitronet Projekte GmbH benefits from the widespread awareness of the company and its excellent reputation as a services provider to the telecommunications sector,” said Torsten Grede, Spokesman of the DBAG Board of Management, at the signing ceremony. “The company is one of the few that is able to provide the entire range of services needed to build larger fiber optic networks and is an excellent platform for growth.”

“This is the fifth transaction in which Christian Grandin and the Livingstone team have supported us. With their profound knowledge of the sector and of our business model, they were able to provide us with a high value-add throughout the entire process and accompanied us with excellent advice during all phases of the transaction. The professionality and determination of the team were decisive in successfully completing the transaction,” said Dirk Pasternack, CEO of vitronet Holding GmbH, on the successful completion of the transaction. In the future, vitronet Holding GmbH will concentrate on its second business line in vitroconnect GmbH, where the Company operates a market-leading brokerage platform for service-based bundled products in the broadband market, the vitroconnect Carrier Aggregation Platform (CAP).

Christian Grandin, Partner at Livingstone Düsseldorf, added: “vitronet Projekte GmbH is a very attractive company in a dynamic market. We are very happy to have successfully advised on its fifth transaction since 2009, including add-on investments, capital raises and growth investments with various counterparties. During a structured, competitive and international sell-side process, we were able to find the perfect solution for the shareholders as well as the management.”

Our previous transactions for vitronet include its acquisitions of Gild.e and Siemens, its buy-out by Ventizz capital Funds IV L.P. and its minority stake sale to RWE Deutschland AG.