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Full-fibre broadband specialist CityFibre acquired for £538m
Full-fibre broadband specialist CityFibre is to be bought by a Goldman Sachs-backed consortium as it seeks more cash to fulfil its expansion plans
Full-fibre broadband network builder CityFibre has agreed to be bought by a Goldman Sachs-backed consortium for £538m, or 81p per share, as it seeks more financing to roll-out broadband services across the UK.
Alongside Antim Infrastructure Partners, Goldman’s West Street Global Infrastructure Partners have formed a new company called Connect Infrastructure Bidco – also known as Bidco – to buy up CityFibre, which specialises in metro network fibre spines to serve small business ISPs and public sector organisations, and is currently branching out to serve consumers through a partnership with Vodafone.
Speaking to Reuters, CityFibre chief executive Greg Mesch said taking the business into private hands was the best option for the business as the building of fibre to the premises (FTTP) networks around the UK reaches fever pitch over the next few years.
CityFibre and Vodafone hope to pass five million properties around the UK with FTTP broadband services between now and 2025, but at current prices that would require substantially greater levels of investment than it can achieve while publicly listed.
CityFibre chair Chris Stone said: “Under private ownership, CityFibre will be able to gain alternative and potentially easier access to the financing required for its announced FTTP deployment. This will strengthen the company’s ability to deliver on its vision to provide full fibre infrastructure to 20% of the UK market.”
Mark Crosbie, managing partner at Antin, said: “We are very excited to support the company in its next phase of development as it becomes a leading alternative fibre-based communications provider in UK cities. We have significant experience in investing and supporting infrastructure businesses in the telecom sector and look forward to working with CityFibre's management team to realise the full potential of their vision.”
West Street global head Philippe Camu said: “CityFibre is an exciting and innovative communications infrastructure company and we strongly support its vision to expand fibre-based broadband networks across the UK. CityFibre can play a significant role in developing the UK’s digital economy and, together with Antin, we look forward to supporting the company in fulfilling that objective.”
Read more about FTTP broadband
- Residents of the remote village of Balquhidder in Stirlingshire have banded together to roll out a full-fibre broadband network at just half the cost of a normal fibre network build.
- Nuco, a Midlands-based supplier of paper and stationery products, has improved its business agility and is moving its IT into the cloud thanks to the government’s full-fibre broadband connection voucher scheme.
Private equity investors have taken a far greater interest in broadband infrastructure builders in recent months, since the government started to come round to the necessity of building full-fibre networks, not merely fibre-to-the-cabinet (FTTC) services that still rely on copper for the last mile connection.
Earlier in 2018, TalkTalk – having made waves with the roll-out of a citywide FTTP service in York – teamed up with Infracapital, the infrastructure investment equity wing of M&G Prudential. It negotiated the formation of a jointly-owned company to take its service to other towns and cities, targeting three million premises at an estimated cost of £1.5bn.
Meanwhile, CityFibre also announced its full-year results for the 12 months to 31 December 2017, revealing its revenues more than doubled over the period – largely thanks to its acquisition of Entanet – to £34.8m. Gross profit rose 48% to £20.1m, but net losses after tax widened from £12.6m in 2016 to £16.6m in 2017.
