Livingstone advised Deutsche Beteiligungs AG (DBAG) on its investment into STG Braunsberg Group (STG), a service provider for the telecommunications sector, with a focus on the construction of fiber-optic networks.
Within the scope of a management buy-out (MBO), DBAG-advised DBAG Expansion Capital Fund (DBAG ECF) will take over the majority stake in STG from Hermann and Günter Braunsberg. The previous owners will retain a stake in the company and will remain in their management positions.
STG Braunsberg Group was formed in 1989 from a construction company which had been founded more than 60 earlier. Since then, Bochum-based STG has established itself as a service provider in the telecommunications sector. In fiber-optic expansion, the company – with approximately 90 employees – acts as a full-service provider: its product range not only comprises construction of fiber-to-the-home (“FTTH”) infrastructure, but also the operation, upgrade and subsequent network maintenance. Municipal utilities, municipalities themselves, and network operators are among STG’s clients. Furthermore, STG maintains the telecommunications network infrastructures in buildings for real estate companies: proprietary internet and TV products run on these networks as well as third-party products. In the Ruhr area, STG operates fiber-optic and wired networks with approximately 20,000 connected households. In total, the company generated a turnover of around 20m euros in 2018.
The demand for high-speed internet connections – and thus the need for fiber-optic links – is increasing continuously. However, only seven per cent of German households are currently connected to fiber-optic networks – the EU average is three times as high. STG is in a position to not only benefit from the resulting strong market growth organically, by expanding geographically, but also within the scope of a buy-and-build strategy, helping the company to grow inorganically via acquisitions. DBAG will support STG in realizing its growth potential by providing the necessary capital and its long-standing experience in the expansion of fiber-optic networks.
STG is the sixth investment DBAG has made in the broadband communications sector since 2013 and is already the second platform investment, which has been successfully realized under the involvement of the Düsseldorf-based Livingstone team.
“With this transaction, our sector-focused investment strategy once again proves to be effective,” Torsten Grede, Spokesman of DBAG’s management board, commented upon signing the contract. “Thanks to the sector expertise we have gained since 2013 with investments in the telecommunications sector, we know the growth drivers of the broadband market in general – and of STG’s business in particular – especially well.”
“DBAG has long-standing experience in our market and understands our business model,” said Hermann Braunsberg, one of STG’s Managing Directors. “Together, we want to develop our group of companies and contribute to the FTTH expansion in Germany,” added Braunsberg.
Christian Grandin, Managing Partner at Livingstone Düsseldorf, commented: “From 2009 onwards we have been successful in realizing already six transactions within the broadband/fiber optic infrastructure industry. Among these e.g. the sale of vitronet Group to funds advised by DBAG in 2017 as well as this MBO of STG Braunsberg Group. We are glad that we were able to share our know-how and expertise within the telecommunications and broadband infrastructure industry with Ragnar Geerdts and his team at DBAG throughout the support of this transaction and that we will be able to continue to advise DBAG also in the future with the proposed buy-and-build strategy.”
Ragnar Geerdts, Managing Director of DBAG, added: “It was a pleasure to work again with Christian Grandin, Johannes Faber and the Livingstone team, which helped us identifying and approaching numerous suitable investment opportunities within the area of broadband communication network infrastructure as well as with their sector-specific and transactional know-how supporting the successful management of the buy-side process.”
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- "We very much enjoyed working with Christian Grandin, Johannes Faber and the Livingstone team who supported us in identifying and addressing suitable investment opportunities in the area of broadband development and the subsequent process support with their transaction and industry know-how."Ragnar Geerdts, Mitglied der Geschäftsleitung , DBAG