CityFibre agrees GBP538m investment bank takeover; names next rollout locations with Vodafone

25 Apr 2018

UK-based pure fibre provider CityFibre, working in partnership with Vodafone UK, has named the next locations where it will deploy city-wide fibre as part of an ongoing project between the pair. In a press release regarding the plans, the companies confirmed that Coventry, Edinburgh, Huddersfield and Stirling are next in line for the full fibre infrastructure programme, joining the previously announced locations of Milton Keynes, Peterborough and Aberdeen. According to CityFibre, adding the new locations will bring ‘the total number of [fibre] premises identified to date to over half a million across seven cities’, while bringing its committed infrastructure investment in the project to at least GBP315 million (USD440 million).

Detailed city-wide planning is reportedly already underway, with CityFibre said to be working closely with each local authority to co-ordinate the build and maximise the benefits of full fibre to each city. The company is already operating wholesale full fibre infrastructure serving schools, council sites and businesses in each of the new project cities, and with construction in Milton Keynes already underway, it is understood work in the other cities will get started ‘in the coming months’.

In separate but related news, CityFibre has agreed a GBP538 million takeover by a Goldman Sachs-backed consortium, Reuters reports, with the fibre provider claiming the move will make it easier to fund its plan to build networks serving 20% of the UK market under private ownership. The consortium, which is jointly owned by Goldman Sachs’ West Street Infrastructure Partners and private equity firm Antin, will pay GBP0.81 per share for the company. Commenting on the deal, CityFibre chairman Chrisn Stone was cited as saying: ‘Under private ownership, CityFibre will be able to gain alternative and potentially easier access to the financing required for its announced fibre-to-the-home [FTTH] deployment … This will strengthen the company’s ability to deliver on its vision to provide full fibre infrastructure to 20% of the UK market.’

Rounding out CityFibre-related news, the company has published its financial results for the year ended 31 December 2017, revealing a 126% year-on-year increase in revenues to GBP34.8 million. Of the total turnover for FY 2017, GBP15.4 million was attributable to the consolidation of Entanet’s results; the provider of wholesale fibre connectivity and communications services to business ISPs was acquired by CityFibre in August 2017. Meanwhile, gross profit increased by 48.4% to GBP20.1 million, with EBITDA for the year in review standing at GBP4.5 million (FY 2016: GBP2.5 million). The company did, however, see net losses widen – from GBP12.6 million in 2016, to GBP16.6 million the following year.

In terms of its operational highlights, CityFibre revealed that its cumulative on-net connections sold were up 27% y-o-y at 9,204, with cumulative on-net connections delivered reaching 4,975 (end-2016: 3,962). The total route kilometres of fibre infrastructure operated by the firm, meanwhile, expanded to 3,740km at the end of 2017, up from 3,383km a year earlier.

United Kingdom, CityFibre (incl. FibreNation), Vodafone UK