New large corporate operation in the fiber optic market. The private equity British Cinven has signed an agreement to reinvest in Ufinet Latam, Gas Natural Fenosa’s former international fiber optic business, through its seventh fund, called Cinven Fund VII, to continue taking advantage of the group’s growth potential. The complex operation, which includes several parallel transactions, values 100% of the company at 2,500 million euros and its closure is scheduled for the first quarter of next year. Natixis Partners Iberia has been the exclusive financial advisor to the British fund in the process.
The Italian energy company Enel has executed its Purchase option over the 79% of Ufinet Internacional that it did not control, subsequently agreeing to simultaneously sell this stake to Cinven and remain a minority partner. In this way, the fund led in Spain by Jorge Quemada will take over 80.5% of Ufinet Internacional for 1,240 million euros and Enel will keep the remaining 19.5% through its subsidiary Enel X International. With the new agreement, the Italian has received 140 million euros for the distribution of Ufinet’s available reserves, a figure subject to possible adjustments at closing.
Partners agreement
With the operation, Cinven keeps Ufinet Latam -considered the jewel in the crown- more time in its portfolio, lengthening its investment period by transferring the asset between its sixth and seventh funds. And, for its part, the Italian power company exercises the purchase right valued at 1,320 million euros that it had since it acquired 79% of the company in 2018. So he private equity British decided to buy back the Ufinet’s Latin American business and sell the Spanish part to a consortium formed by Antin Infrastructure Partners, which took control of Ufinet Spain, while Cinven’s Fund 6 remained with Unifet Latam.
In this new stage, the Italian Enel will have representation on the Board of Directors of Ufinet and will retain a carry-over right, known in financial jargon as drag along, to sell its residual stake with Cinven. The energy company calculates that the operation will mean a cash inflow of 60 million euros and capital gains of about 200 million.
Currently, Ufinet Internacional owns a network of 80,000 kilometers of dark fiber present in 17 Latin American countries, including Colombia, Panama, Guatemala and Costa Rica, as well as Mexico and the United States.
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