Investments in ETC Group by Cinven and Carlyle to further the Group’s rapid rise to create global market leader in telecommunications distribution solutions.
June 9th, 2022: ETC Group, the global leader in distribution, logistics, technical expertise, and product design supporting the telecommunications and broadband industry, announced today that international private equity firm, Cinven, has entered into exclusive negotiations to acquire a majority stake in ETC Group from global investment firm, Carlyle (NASDAQ: CG). Carlyle will reinvest for a significant minority stake in the Group. The transactions are subject to works council consultation and customary regulatory approvals. The financial terms of the transactions are not disclosed.
Founded in 1993 by Cédric Varasteh, ETC Group is a one-stop shop value-added distributor of passive and active telecommunications equipment and tooling with best-in-class technical and logistics solutions for network deployment, upgrades, and maintenance, supporting FTTH, FTTx, HFC, Wi-Fi, 5G/mobile, and data center technologies with over 30 years of extensive industry expertise. ETC Group has over 1,200 employees across 38 locations that span 12 countries including the United States, France, the United Kingdom, Germany, and Portugal, and supports 14,000+ customers worldwide including major American and European cable operators and telecommunications service providers. The Group’s comprehensive portfolio of 55,000+ products from close to 1,000 industry-leading suppliers, along with their value-added supply chain solutions support carriers’ seamless delivery of high-speed Internet, Video, Data, and Voice services to Residential, Business, and Mobile Users.
In 2020, ETC Group acquired Comtec, one of the UK’s largest value-added distributors of telecom and IP equipment to both the carrier and enterprise markets. The following year, USTC Corp, the U.S. subsidiary of ETC Group, acquired North Carolina-based distributor of telecommunications products and services, Walker, as well as the Pennsylvania-based distributor of outside plant material and equipment, Comstar Supply. In addition to recent acquisitions, ETC Group opened a state-of-the-art facility dedicated to product R&D and innovation in Portugal. The combination of sustained organic growth in existing markets, international expansion, strategic acquisitions, and innovation in technology and diversification in new product areas has helped propel the Group to over 1bn € in sales revenue globally.
ETC Group’s accomplished management team will remain in place to fuel their accelerated international growth. Founder and Chairman of the Board, Cédric Varasteh, commented: “With Cinven and Carlyle combined, it gives us the fire power to rapidly enhance our one-stop shop offering and expand our geographic presence in existing and new territories. We’re showing our customers what’s possible at the intersection of innovation, technology, and communication, and we look forward to working with the Cinven and Carlyle teams, who have exceptional experience in our sector.”
Thomas Railhac, Partner at Cinven, added: “Telecoms infrastructure and maintenance investment continues to show strong growth characteristics based on the need for operators to invest in the latest technologies and network resilience in order to meet the needs of their customers. ETC Group is well positioned to create value from these trends through its one-stop shop specialist approach, its international footprint, and its strong reputation. We are delighted to partner with Cédric Varasteh and his team, and we look forward to supporting them on their growth ambition.”
Cyril Bourdarot, Managing Director on the Carlyle Europe Technology Partners Advisory Team commented: “Through a combination of investment in innovation, M&A and international expansion – particularly in the U.S., and strengthening management teams, ETC has achieved remarkable growth. Together with Cédric, we have established ETC as a category leader in value-added distribution for telecom and technology infrastructure equipment and as the natural best-in-class consolidator on this attractive and highly fragmented market. It has been a great pleasure partnering with Cédric and his management team. We are delighted to reinvest for a significant stake in the business to continue to support ETC’s strong growth trajectory.”
Cédric’s steadfast focus on valued customer and partner relationships has propelled the growth of his global enterprise and he employs the same approach as ETC Group, Cinven, and Carlyle move forward together. Capitalizing on investments in network infrastructure and an increasing need for connectivity both with consumers and businesses, the partnership with Cinven and Carlyle will help power ETC Group’s growth trajectory.
About ETC Group
ETC Group is a global leader in distribution, logistics, technical engineering, and product design with over 30 years of expertise and performance supporting the telecommunications and broadband industry. Founded in 1993 by Cédric Varasteh, ETC Group supplies and distributes a comprehensive range of passive and active equipment and tooling for network deployment, upgrades, and maintenance, supporting all technologies including FTTH, FTTx, HFC, Wi-Fi, 5G/mobile, and data center. ETC Group employs over 1,200 people across 12 countries, and its experienced team works hard every day enabling technology and innovation to create a more connected future.
Cinven is a leading international private equity firm, which has been investing since 1977. Cinven takes a responsible approach towards its funds’ portfolio companies, their employees, suppliers and the local environment. Cinven’s strategy is to acquire successful companies and help them grow and develop. The firm is currently investing the Seventh Cinven Fund, which closed in May 2019 with capital commitments of €10.0 billion. The Cinven funds have a long and successful track record of investing in European and US private equity.
About The Carlyle Group
Carlyle (NASDAQ: CG) is a global investment firm with deep industry expertise that deploys private capital across three business segments: Global Private Equity, Global Credit and Global Investment Solutions. With $325 billion of assets under management as of March 31, 2022, Carlyle’s purpose is to invest wisely and create value on behalf of its investors, portfolio companies and the communities in which we live and invest. Carlyle employs nearly 1,900 people in 26 offices across five continents. Further information is available at www.carlyle.com. Follow Carlyle on Twitter @OneCarlyle.
Lindsay Hittner, Director of Marketing