DIF Capital Partners, through its DIF Core Infrastructure Fund I (CIF I), has agreed to sell its 55% ownership stake in ADTIM SAS, a wholesale fiber company in France, to HICL Infrastructure, the London-listed core infrastructure investment company managed by InfraRed Capital Partners. In terms of valuation, HICL notes that ADTIM will represent ~2% of its £3.1bn ($3.9bn USD) portfolio, by value, which implies that DIF Capital is selling its 55% stake for ~£64m ($80m USD).

InfraRed has been seeking to invest in France’s fiber market through HICL, given the sector’s maturity, regulated framework, and concession-based delivery model. With these characteristics, InfraRed considers France’s fiber market to be at the lower end of the infrastructure risk spectrum, which suits HICL as a core infrastructure investment vehicle.

Finally, the transaction is expected to close in Q3 2022, at which time, the investment will be funded through HICL’s existing credit facilities.

ADTIM – DIF Sells to InfraRed’s HICL

ADTIM operates an independent wholesale fiber network that provides households in low-density rural areas of the Ardèche and Drôme departments, in southeast France, with 11.4k miles (18.3k kilometers) of fiber-to-the-home (FTTH) broadband infrastructure. Procured under France’s Ultra High Speed Broadband Plan (PFTHD), ADTIM is the sole wholesale provider of this subsidized rural network, with pricing regulated by ARCEP, France’s telecommunications regulator.

Public Initiative Networks (PIN)

ADTIM is a special purpose vehicle (SPV) holding two concession contracts from the local authority, under France’s Public Initiative Networks (PIN) scheme. Through two business units, PIN1G and PIN2G, ADTIM operates two fiber networks providing broadband access to telecom operators serving the residential and business retail markets in the Drôme and Ardèche departments of southeast France:

  • PIN1G: operates 1.4k miles (2.3k kilometers) of fiber under a 25-year concession awarded in 2008, which has been fully operational since 2011
  • PIN2G: 9.9k miles (16.0k kilometers) of fiber in 640 municipalities, under a 19-year concession awarded in 2016 to deploy and operate ~350k FTTH lines by 2025

Notably, ADTIM’s PIN2G network remains in the deployment / roll-out phase, with a target for completion in 2025. In this case, the local authority bears the full risk of construction and delivery obligations of the lines under the concession contract.

Network Operations

ADTIM’s network is managed by Axione, a large wholesale operator in France and subsidiary of Bouygues Energies & Services, which is part of Bouygues Group. In France, Axione manages ~20% of all fiber-to-the-home (FTTH) PIN areas and offers services including design, roll-out, and operations.

Business Model

ADTIM generates wholesale revenues from the sale of its broadband and network services to internet service providers (ISPs) such as Free (Iliad), Bouygues Telecom, Orange, and SFR (Altice) under an ARCEP-regulated tariff. In total, ADTIM’s network serves over 2.0k enterprises.

Additionally, ADTIM’s operating costs are largely contracted under long-term agreements with Axione.

Transaction Advisors – DIF Capital, InfraRed, HICL

DIF Capital’s financial advisor for its stake sale of ADTIM to InfraRed’s HICL was DC Advisory. Additionally, DIF Capital’s legal advisor was Orrick.

InfraRed and HICL’s financial advisors for the ADTIM transaction were Investec Bank and RBC Capital Markets.

DIF Capital Partners – Overview

DIF Capital Partners is an infrastructure investment manager with €11bn in assets under management (AUM). The firm’s fund series, DIF Core Infrastructure Fund (DIF CIF), invests in small- and mid-sized Core+ infrastructure assets globally, targeting mid-term contracted cash flows with a modest risk profile. DIF CIF invests predominantly in the sub-sectors of digital, transportation, and energy.

DIF Capital, through its DIF CIF I, II, and III funds, has made investments in:

  • Airtower Networks: U.S. developer, owner, and operator of in-building wireless networks (i.e., distributed antenna systems or DAS) and provider of managed services
  • Edsger: 49% equity stake in seven data centers located throughout the United States. Each facility offers ~5 megawatts to 15 megawatts of critical power capacity
  • Joink: provides enterprise fiber, residential fiber, and fixed wireless services in rural markets of Western Indiana and Eastern Illinois in the United States
  • Valley Fiber: investing ~$260m USD ($328m Canadian dollars) to bring broadband to rural and underserved communities in Manitoba, Canada

InfraRed Capital Partners – Overview

InfraRed Capital Partners has its headquarters in London, UK and manages $10bn+ of equity capital in multiple private and listed funds. The firm is 80%-owned by SLC Management, which is the institutional alternatives and asset management business of Sun Life Financial.

InfraRed focuses on value-add infrastructure investing globally, in both greenfield and brownfield assets. Particularly, the firm invests across the social, transportation, and renewable energy infrastructure sectors. Within digital infrastructure, InfraRed has made investments in:

  • Complete Technology Group (CTG): UK provider of fiber consulting, planning, audit, and installation services to landlords, which operates via its Complete Fibre division
  • Deutsche GigaNetz: fiber-to-the-home (FTTH) provider in suburban and semi-rural regions of Germany, with its first deployments being in the states of Hesse and Baden-Württemberg
  • Public Safety Towers (PSTC): independent tower company in the United States which focuses on servicing commercial data consumption and providing reliable wireless coverage to first responders
Jonathan Kim covers Fiber for Dgtl Infra, including Zayo Group, Cogent Communications (NASDAQ: CCOI), Uniti Group (NASDAQ: UNIT), Lumen Technologies (NYSE: LUMN), Frontier Communications (NASDAQ: FYBR), Consolidated Communications (NASDAQ: CNSL), and many more. Within Fiber, Jonathan focuses on the sub-sectors of wholesale / dark fiber, enterprise fiber, fiber-to-the-home (FTTH), fiber-to-the-premises (FTTP), and subsea cables. Jonathan has over 8 years of experience in research and writing for Fiber.


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