Warburg Pincus buys stake in Polish cable operator INEA
LONDON, April 23 (Reuters) - Private equity group Warburg Pincus has bought a stake of just under 50 percent in Polish cable operator INEA, providing funding to expand its network and make acquisitions.
INEA, the fourth largest cable operator in Poland, said Warburg's investment would help it expand its high speed broadband reach in the Western region of Wielkopolska, as well as funding a partnership with the local government to construct a 4,000-kilometre fibre optic backbone and distribution network.
"Overall broadband penetration in Poland is significantly behind where it is in western European countries. It is in long-term structural growth and over time we expect it to catch up," Paul Best, a managing director at Warburg Pincus, told Reuters.
"There is a long-term ambition to expand the network all the way across the province and they need capital to do that."
There are more than 15 smaller cable companies operating in the same province and over time INEA is also interested in acquiring some of these, he said.
Best said Warburg had taken a stake of just under half of INEA and would be represented on its board.
Warburg did not disclose how much it had paid, but said it believed it was the largest private equity investment in Poland this year.
Warburg has previous experience in the cable industry, including creating Dutch cable group Ziggo through the merger of three smaller firms. It has also invested more than $1 billion in Central and Eastern Europe since 1997.
INEA, which was founded in 1992 and provides television, internet and telephone services, last year had revenues of 169 million Polish zloty ($54 million).