Carlyle enters into exclusive negotiations to sell a controlling stake in Euro Techno Com Group
- Carlyle has supported ETC’s exceptional growth, accelerated its product innovation, expanded internationally and strengthened management
- Carlyle will re-invest for a significant minority stake to support ETC’s long term ambitions
Global investment firm Carlyle (NASDAQ: CG) today announced that it has entered into exclusive negotiations to a sell a controlling stake in Euro Techno Com Group (“ETC” or the “Company”), a leading a “one-stop shop” value-added distributor for the telecom network and technology infrastructure industry, to Cinven. As part of the transaction, Carlyle will re-invest for a significant minority stake. The transaction is subject to works council consultation and customary regulatory approvals. The financial details of the transaction were not disclosed.
Carlyle invested in ETC through Carlyle Europe Technology Partners (“CETP”) IV, a EUR 1.35 billion fund that invests in small and mid-market technology-focused opportunities. Through Carlyle’s partnership with Founder Cédric Varasteh, ETC has delivered exceptional growth. The Company has tripled revenue which exceeded €1bn in 2021, increased staff from 440 to 1,200 employees, and has expanded its geographic footprint from 4 to 12 countries - consolidating a strong position in the attractive US market, which represents more than half of its sales. Leveraging its deep technology and telecom sector experience, Carlyle has supported ETC’s organic growth through investment in new product segments (mobile, datacenter, metrology) as well as R&D for ETC designed products and innovative solutions. Carlyle has supported the business through M&A, transforming ETC into a leading consolidation platform in a highly fragmented market, notably with the acquisitions of Comtec in the UK, and Walker & Associates and Comstar Supply in the US. Cédric has worked with Carlyle to implement operational and organizational changes to strengthen the Company’s management capabilities and increase its scale.
Innovation in technology and diversification into new product areas has been an integral component of ETC’s growth under Carlyle’s ownership, enabling ETC to penetrate new customers and geographies, particularly in the US and in Europe. The creation of an R&D and innovation lab in Portugal for ETC’s designed and branded products has supported the Company’s drive in innovation and accelerated expansion into new product segments.
With growing spend in telecom infrastructure to support increasing bandwidth requirements and connected economies, further technological evolution has driven capex and increased complexity across the telecom value chain (including fragmentated local demand across operators and network technologies, outsourcing of installation, and the procurement challenges in a sector of global supply), supporting the emergence of a specialist distribution platform in this space. Cédric and Carlyle shared a common vision to build a global, industry-leading value-added distribution platform, utilizing the Company’s exceptional management, its unique and differentiated expertise in telecom, and its strong relationship with suppliers. In partnering with Carlyle, ETC has established itself as a leading one-stop shop, offering a comprehensive portfolio of more than 55,000 products and value-added services for diverse technologies and segments (fixed mobile, datacenter and tooling & accessories), that benefit from increasing telecom capex and investment in technology infrastructure.
Cédric Varasteh, Founder and Co-Chairman of the ETC Group, said: “I want to thank my entire team and Carlyle, particularly CETP’s Cyril Bourdarot and Remy Salettes, for this truly successful partnership and their outstanding involvement in ETC’s transformation. Carlyle has leveraged its extensive understanding of our industry coupled with its global network to drive remarkable growth, completing three strategic acquisitions, bolstering the team with high quality talent and supporting us to build a specialized, diversified and truly unique proposition within the complex telecom value chain. We are delighted to continue this incredible journey with Carlyle as they retain a significant minority stake.”
Cyril Bourdarot, Managing Director on the CETP advisory team, said: “Through a combination of investment in innovation, M&A and international expansion - particularly in the US, and strengthening management teams, ETC has achieved remarkable growth. Together with Cédric, we have established ETC as a category leader in value added distribution for telecom and technology infrastructure equipment and as the natural best-in-class consolidator on this attractive and highly fragmented market. It has been a great pleasure partnering with Cédric and his management team. We are delighted to reinvest for a significant stake in the business to continue to support ETC’s strong growth trajectory.”
Vladimir Lasocki, Managing Director and Co-Head of the CETP advisory team, said: “The success of ETC under Carlyle’s ownership is another great example of our Fund strategy of working closely in partnership with founders and management teams to execute ambitious value creation plans in a global environment. We are incredibly proud of the significant growth the Company has achieved over Carlyle’s period of ownership.”
About The Euro Techno Com Group
The Euro Techno Com Group (the ETC Group) is a one-stop-shop valued-added distributor of equipment and supplies for the telecommunications market. Founded in 1993 by Cédric Varasteh, the ETC Group supplies and distributes a comprehensive range of passive and active equipment and tools for telecom network deployment and maintenance and offers a comprehensive range of services including product design and equipment selection, sourcing, outsourced procurement and logistics solutions for cable and telecom operators and network installers and their subcontractors. Today, the ETC Group employs over 1,200 people and serves 14,000 customers in 12 countries including the USA, the UK, France and Germany.
About The Carlyle Group
Carlyle (NASDAQ: CG) is a global investment firm with deep industry expertise that deploys private capital across three business segments: Global Private Equity, Global Credit and Global Investment Solutions. With $325 billion of assets under management as of March 31, 2022, Carlyle’s purpose is to invest wisely and create value on behalf of its investors, portfolio companies and the communities in which we live and invest. Carlyle employs nearly 1,900 people in 26 offices across five continents. Further information is available at www.carlyle.com. Follow Carlyle on Twitter @OneCarlyle.
+44 (0) 7384 513568