CityFibre taken private by consortium in £538m deal

Broadband provider CityFibre has been bought by a consortium of investors including West Street Infrastructure Partners, an arm of Goldman Sachs, and Antin Infrastructure Partners.

The ISP was formerly listed on the alternative investment market (AIM) but has now been taken private in a deal worth some £538m. The deal is thought to have taken place due to confidence among the investors that demand for speedier broadband connections will increase over the coming years.

In addition, CityFibre has recently confirmed a major outsourcing deal with Vodafone, which should help it to reach its goal of reaching a fifth of UK homes by 2025.

Some analysts claim that the deal should have been worth more due to the fact that CityFibre could take on its largest rival for providing broadband to the masses around the UK.

CityFibre builds and rents access to fibre optics around the UK, as opposed to actually providing broadband services itself.

CityFibre’s chief executive, Greg Mesch, responded to the news of the deal with the following comment about its previous situation being listed on the AIM: “Aim investors, they want their breakfast tomorrow. It’s ‘gimme, gimme, gimme’. The more success we had, the more the stock went down. This is a 10-year horizon now. The idea is to go bigger and faster.”

CityFibre's chairman, Chris Stone, stated: “Under private ownership, CityFibre will be able to gain alternative and potentially easier access to the financing required for its announced FTTH (fiber-to-the-home) deployment."

“This will strengthen the company’s ability to deliver on its vision to provide full fiber infrastructure to 20 per cent of the UK market.”