UKB Networks Ltd Moves to Gobble Fibre Optic and Wireless ISP Keycom

Communications and Internet provider UKB Networks Ltd. (HKT), which runs a number of 4G (LTE) fixed wireless broadband networks across the United Kingdom, has made a cash offer to buy Stafford-based fibre optic and wireless provider Keycom.

Keycom helps to run various WiFi and fixed line fibre optic broadband networks, such as their work alongside CityFibre to connect student accommodation buildings in York and the separate deployment of 1000Mbps FTTH/P with Vision Fibre Media to residents of the Kings Chelsea and Barbican development in London (England). Not to mention their work with armed forces accommodation.

Clearly this has been enough to attract the interest of UKB Networks, which has today reached an agreement to buy Keycom for the company’s “entire issued and to be issued ordinary share capital“. Under the deal holders of Keycom Shares shall be entitled to 58.78p in cash per share (the “Initial Consideration”) and a further 7.44p, subject to adjustment and the Cap, by way of deferred consideration.

The Offer, excluding the Deferred Consideration, values the entire issued ordinary share capital of Keycom (on a fully diluted basis) at approximately £11.8 million (excluding the Warrants) or £13.3 million when you include the Deferred Consideration values.

Apparently Keycom’s directors have unanimously recommended that their Shareholders accept the offer and an overwhelming majority appear to have already indicated their approval.

The Offer Statement

“The PCCW Global Group provides international telecommunications services to multinational enterprises and telecommunications service providers, which include IP solutions, IP MPLS VPN services, fibre and satellite transmission solutions, voice, data and video services and managed network services and transmission solutions as well as CDNs for content delivery. These services can be made available to Keycom’s customers, thus enhancing the attractiveness and cost effectiveness of Keycom’s services. Additionally, international connectivity to business customers can further enhance Keycom’s product portfolio and range of target customers whilst at the same time helping the PCCW Global Group to expand its international market and UK market share.

UKB Networks sees an opportunity to meet growing demand for ubiquitous broadband connectivity through building resilient high availability wireless and wired networks. UKB Networks identifies in Keycom a strong, well-established business with a talented leadership team and employees, servicing a growing customer base across a number of interesting sectors. UKB Networks believes the Keycom business can form a base from which UKB Networks can develop further campus network solutions complementary to those already created by both Keycom and UKB Networks. These solutions range from next generation “digital inclusion” broadband via fixed wireless to “smart city” campus solutions.

UKB Networks has access to significant amounts of 4G LTE spectrum that can enable the delivery of high capacity, next generation, broadband by fixed wireless access. UKB Networks believes the use of next generation fixed wireless broadband, in addition to the fibre based solutions already deployed by Keycom, will increase the potential growth of the Keycom business. Additionally, UKB Networks has access to high capacity microwave backhaul spectrum which will enable Keycom to scale its offerings as demand grows in a cost efficient and competitive manner.”

ISPreview.co.uk understands that UKB was one of several parties that approached the board of Keycom during the second half of 2014 to express a serious interest in acquiring the company and the situation grew from there.