Netzkontor sponsor DBAG weighs exit options following beauty pageant

Patrick Costello , Min Ho and Charlie Taylor-Kroll
19 July 2023

Tweet
Facebook
LinkedIn
Google plus
Send to

Netzkontor’s backer DBAG is in the early stages of exploring exit options for the German telecoms service provider, three sources familiar with the situation told Mergermarket.

A beauty pageant for a sellside mandate was held recently, two of the sources said, one noting that a mandate for Netzkontor has yet to be awarded.

Frankfurt-based DBAG is expected to kick off a process in 1H24, although no final decision has been made on the timeline, one of the sources said.

Netzkontor generated around EUR 30m EBITDA in FY22, two of the sources said. Its sales are in the range of EUR 122m-EUR 125m, one source added.

In 2022, the company posted around EUR 122m in preliminary sales, up from EUR 58m in 2021 and EUR 51m in 2020, according to DBAG's website. Netzkontor's sales are expected to grow at "double-digit rates" in the coming years, the website adds.

Netceed, a French distributor for the telecoms network industry formerly known as ETC Group, could be one potential buyer for Netzkontor, one of the sources said. In February, ETC Group acquired DBAG's stake in BTV Multimedia, a German provider of broadband telecoms equipment and services, for an undisclosed sum, as reported.

DBAG acquired a majority stake in Netzkontor from its founders in 2018 via its DBAG Expansion Capital Fund (DBAG ECF), with co-founders Dirk Mueller and Peter Schmidt retaining the remaining stake in the firm, according to Mergermarket data.

Netzkontor has a score of 57 according to Mergermarket's Likely to Exit (LTE) predictive algorithm*, weighted substantially by how long it has been under these sponsors' ownership.

Under DBAG's tenure, Netzkontor has completed 13 add-on acquisitions, helping to drive its regional expansion and strengthening its installation and interference suppression segments, according to the sponsor's website.

Recent bolt-on deals include its acquisition of Adams Network Engineering, a German provider of engineering services for broadband expansion, in March.

In 2020, Netzkontor also acquired a set of six broadband communications companies that included German data network installer TKS Telekommunikation und Service, German telecoms contractor TKM Telekommunikation und Service and SSF Telekommunikations-Management, a German complex services provider for Vodafone [LON:VOD], as reported.

Founded in 2008 as netzkontor nord and headquartered in Flensburg, Netzkontor bundles various services for the telecommunications industry, including the planning and monitoring of the construction of fiber optic networks and network management services based on long-term contracts with fiber optic network operators, according to DBAG's website.

Netzkontor has around 1,300 employees at 30 locations across Germany, according to its website. The group is composed of 16 different service companies specialising in the fields of broadband and fiber optic expansion and operating nationwide.

DBAG declined to comment. Netzkontor and Netceed did not respond to requests for comment.

*Based on a number of key industry, holding behaviour, and dealflow criteria, Mergermarket's next-generation platform assigns a Likely to Exit (LTE) score to each exit opportunity, with a higher score corresponding to a higher likelihood for an imminent transaction.