Partnership with founder and CEO to back an industry leader in its global expansion
International private equity firm, Cinven, today announces that it has entered into exclusive negotiations to acquire a majority stake in the Euro Techno Com Group (‘ETC Group’, ‘ETC’ or ‘the Group’), a one-stop shop specialised distributor for the telecom and technology infrastructure industry, from Carlyle. The Founder and CEO, Cédric Varasteh, would retain a significant stake. Financial details of the transaction are not disclosed.
Founded in 1993 by Cédric Varasteh, ETC Group is a global leader and partner in the design, procurement and distribution of materials, tooling and equipment used by telecom operators and their subcontractors to install, build and maintain wireline and wireless infrastructure and other digital infrastructure.
Headquartered in France, the Group’s c. 1,100 employees service the needs of ETC’s c. 14,000 customers primarily across Europe and the US.
Cinven’s Technology, Media and Telecom (‘TMT’) and Business Services Sector teams, working closely with Cinven’s French and North America Regional teams, identified ETC Group as an attractive investment given:
- Structural market tailwinds, including the continued need for telecom infrastructure investment and network maintenance spend, driven by growing data consumption trends, cloud and edge computing and increased connectivity;
- ETC’s leading position serving telecoms networking companies in a highly attractive and resilient market segment, underpinned by its strong reputation and customer advocacy given its differentiated proposition and value-added service offering;
- ETC’s strong historical financial performance, which has been driven by a combination of organic growth in existing markets, international expansion, and add-on acquisitions. Today the Group generates more than €1 billion of revenues;
- The highly fragmented markets in which ETC operates, which provide opportunities for the Group to continue to pursue M&A across a range of product segments and regions, including in Europe and the US, alongside further enhancing its organic growth trajectory; and
- The strong entrepreneurial management team, led by ETC’s founder and CEO, Cédric Varasteh.
This transaction would build on Cinven’s strong and proven track record in the telecoms sector, including through its funds’ investments in Numéricable in France, Ziggo in the Netherlands, MásMóvil in Spain, Ufinet in Spain and Latin America, and Nitel in the US. It would also build on Cinven’s strong Business Services and distribution expertise, including through its funds’ investments in Barentz and Ahlsell. In addition to the significant stake that would be retained in the Group by ETC’s founder and CEO, the previous majority shareholder, Carlyle, would also re-invest in a minority stake, alongside Cinven.
Cédric Varasteh, Founder and CEO of ETC Group, commented:
“Our business has a leading position in an industry where the intersection of technological change and network resilience is driving significant opportunity. We have the ambition to create a global leader in our industry and through Cinven’s investment, we have a partner with significant experience in the telecom and distribution sectors and look forward to taking our business forward at pace.”
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.”
David Giroflier, Senior Principal at Cinven, added:
“Cinven’s significant experience in telecoms and distribution combined with an interest in seeking highly resilient investment opportunities led us to ETC Group. We are delighted to be investing alongside an ambitious and driven management team that has real focus and can leverage Cinven’s capital and experience to drive value though organic growth and acquisitions. Once again, Cinven is delighted to be partnering with a founder, having also recently invested in MásMóvil, Drake Software, think-cell, True Potential and Nitel.”
Cinven is a responsible, ESG-focused investor, and committed to maintaining the environmental, regulatory and employee stakeholder responsibilities of ETC Group.
The transaction is subject to works council consultation and customary regulatory approvals.