CVC Capital Partners agreed to pay $150 million for a 50% stake in Japanese telecoms carrier Arteria Networks from Japanese trading house Marubeni.
Arteria is one of only four operators in Japan with a nationwide fibre network infrastructure.
The deal marks London-headquartered CVC’s third investment in an Asian broadband firm.
"There are many areas of potential synergies with CVC's telecom assets which we would look to pursue in order to accelerate Arteria's Asian expansion," said Hikaru Minami, a managing executive officer at Marubeni.
CVC bought Hong Kong Broadband Network (HKBN) in 2011, the second-largest broadband operator in Hong Kong. CVC invested HK$5 billion.
At the time it was the biggest LBO in Hong Kong, backing a management buy-out of HKBN with an enterprise value of $650 million.
Almost all the major international and regional banks were involved with the financing of the deal that contained long-term bank loans making up about 50% of the total transaction size. In early January 2013, a refinancing bond issue was successfully placed.
HKBN is now eyeing an IPO early next year, according to market sources.
PT Link Net
CVC also invested $274 million in PT Link Net, the largest broadband and cable network operator in Indonesia, during 2011. The private equity firm upped its investment to 49%. The Riady family owned the remaining 51%.
The fund recently tried to sell PT Link Net but had to reduce the size of its share sale due to paltry demand.
CVC and Indonesian internet company First Media sold 30% of their combined stake in the broadband and cable TV arm of Indonesia’s Lippo Group at Rp6,000 per share, below the initially marketed range of Rp6,200 and Rp6,700 per share, according to a term sheet seen by FinanceAsia.
All of the company’s shareholders had initially sought to sell 40% in the company — CVC and First Media planned on offloading a combined 33% stake while the remaining 7% stake was to be sold by two private equity funds. In total, 1.217 billion shares were on offer.
But poor market conditions kept investors on the sidelines and forced the shareholders to reduce the number of shares by 10% in total, to 912.8 million shares.
CVC sold 473.1 million shares, or 15.6%, while First Media sold 226.7 million shares, or 7.4%. Post-sale, both own 33% of Link Net each, according to the term sheet.
Since Link Net raised Rp486 billion in its June IPO, it has returned more than 300%.
CVC has also worked alongside the Lippo Group after acquiring a majority stake in Matahari Department Stores in 2010.
CVC was advised on its Arteria purchase by Sangyo Sosei Advisory, Bank of America Merrill Lynch, Roland Berger, Alix Partners, Clifford Chance and PwC.