The Canada Pension Plan Investment Board (CPP Investments), based in Toronto, has entered into an agreement to join the Optics BidCo investor group, which is acquiring NetCo – the most extensive telecoms network in Italy – from Telecom Italia (TIM). CPP Investments has committed to acquiring a 17.5 percent interest in NetCo for up to $2.2 billion, as part of a transaction which values NetCo at an enterprise value of approximately $20.6 billion.
The Optics BidCo investor group, led by Kohlberg Kravis Roberts & Co. (NYSE: KKR), includes a wholly owned subsidiary of the Abu Dhabi Investment Authority, the Italian infrastructure fund F2i, and the Italian Government Ministry of Economy and Finance. The closing of the transaction is expected in the summer of 2024 subject to customary conditions.
The newly defined NetCo business primarily consists of the fixed network assets being spun off from TIM. NetCo offers connectivity to homes and businesses across Italy on an open-access wholesale basis with a mix of copper and fiber-based technologies.
“NetCo will provide critical end-to-end data connectivity services that support the functioning of the Italian economy,” said James Bryce, Managing Director, Global Head of Infrastructure, CPP Investments. “Our investment alongside these key partners with a shared long-term vision will help deliver high-quality digital infrastructure across Italy as well as generating long-term risk-adjusted returns for the fund. We are optimistic that NetCo can represent the first of several infrastructure investments in Italy for CPP Investments.”
The investor group will support the completion of an extensive upgrade to NetCo’s existing network. The upgrade involves expanding high quality and high-capacity fiber-based services in urban and rural areas, decommissioning of legacy copper technologies, making improvements to IT functionality, and driving efficiencies in the business.
CPP Investments is an active global infrastructure investor with 29 direct investments in 13 countries totaling over $38 billion as of year-end 2023. It has significant investments in digital infrastructure businesses, including Boldyn Networks (U.S., U.K., Italy), Cellnex (Pan-European) and V.Tal (Brazil).
By John Celentano, Inside Towers Business Editor
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