A State-backed fund is set to buy 78 per cent of broadband firm Enet in a deal that values the company, which is among groups vying for lucrative National Broadband Plan contracts, at up to €200 million.
The Irish Infrastructure Fund (IIF) – which was set up by Irish Life in 2012, backed by the State's Ireland Strategic Investment Fund and managed by Australian investment company AMP Capital – aims to close the deal by the end of the year.
The change of control was prompted by the decision by US investment firm Oak Hill to sell its 47 per cent stake in Enet. Oak Hill had backed Irish-American David McCourt’s company, Granahan McCourt Capital, in a deal to buy Enet four years’ ago.
IIF’s offer prompted other minority investors to also sell out. The deal values Enet at €150-€200 million, including debt.
Granahan McCourt and US billionaire Walter Scott, a childhood friend of investment guru Warren Buffett, will retain their combined 22 per cent stake.
"We want to be here for the long term and the Irish Infrastructure Fund is the right partner," Mr McCourt told The Irish Times.
The Granahan McCourt-led consortium paid a reported €43 million in 2013 for Enet, whose core business is managing the State’s network of metropolitan area networks in 94 towns around the Republic, selling broadband packages to retail service providers. They subsequently invested €100 million expanding the business, which now commands about a 40 per cent share of Ireland’s nascent fibre-to-the-home broadband market.
Enet has plans to expand elsewhere in Europe.
AMP Capital's Philip Doyle, principal of the IIF, said the Enet business is an attractive asset for the fund's investors, mainly comprised of Irish pension funds and trusts.
A successful bid by Enet for one or both of the 25-year National Broadband Plan contracts in the coming years would boost its value significantly. Enet is competing with Eir and Siro, a joint venture between ESB and Vodafone, for the business.