Global investment firm The Carlyle Group (NASDAQ: CG) announced today that it has made an investment in the Euro Techno Com Group (the ETC Group), a one-stop shop value-added distributor of passive and active telecom equipment and supplies offering product design, sourcing and logistics solutions for cable and telecom operators for network deployment and maintenance in Europe and the United States.
Equity for the investment comes from Carlyle Europe Technology Partners (CETP) IV, a €1.35 billion fund that invests in lower middle market technology-focused companies in Europe and the US. The proposed transaction will be subject to customary regulatory approvals and is expected to close in the second half of this year. Further financial details were not disclosed.
Founded in 1993 by Cedric Varasteh, the ETC Group is headquartered in Eaubonne (Ile-de-France), France and has operations in France, the United States, Portugal and Israel. The company’s offering covers product design, procurement and supply chain, including logistics for cable and telecom operators and network installers. Its model enables telecom customers to maximize operations efficiency and lower their deployment costs – a critical aspect of their operations as the operators will ramp up fibre deployment. Customers include major American and European cable and telecom operators, as well as large and small independent installers and sub-contractors.
Cédric Varasteh, Founder of the ETC Group, said: “Our Group is well positioned to capitalize on the huge growth in demand for data services and fibre broadband. Across all geographies, operators have started to upgrade existing networks and prepare or pursue long-term roll-out plans for fibre infrastructure and 5G. Over the past few years, the ETC Group has experienced sustained double-digit growth, driven by our customers’ network deployment, new customer wins and our rapid penetration of new countries. We have also expanded our range of products and technologies, technical expertise and breadth of services to establish ourselves as an organisation which delivers results for our customers – as this has always been our absolute priority. We look forward to working with the Carlyle team, who have valuable experience in our sector and internationalizing businesses.”
Thierry Rathuille, Head of European operations of the ETC Group, commented: “The ETC Group has developed an attractive model and strong execution capabilities in procurement and logistics. We see many growth levers for the company today and want to be in the best position to do more for our customers and further accelerate our development. This partnership with Carlyle will help the ETC Group move to the next level and support our ambitious growth plan both in existing and new geographies.”
Cyril Bourdarot, Director on the CETP advisory team, said: “The ETC Group has developed a comprehensive and unique proposition for operators enabling its customers to simplify and lower the cost of maintenance, upgrade and roll-out plans at a time when increasing broadband speed is strategic for operators to retain and attract new subscribers. We believe, this positions the ETC Group as a differentiated player with a relevant offering in a market with attractive fundamentals.”
Vladimir Lasocki, Managing Director and Co-Head of the CETP advisory team, concluded: “The ETC Group will be the first deal of CETP IV. With its strong presence both in Europe and the USA, ETC is a perfect fit for CETP’s strategy and transatlantic team. We have followed the growth of the ETC Group for a number of years, and have been very impressed by the ETC Group’s management team. We believe the ETC Group’s model makes a lot of sense in the telecom value chain that has become increasingly fragmented and complex. We are excited to bring our experience and network in the telecom sector to become a key partner to the management team as they continue their expansion.”