Business Broadband ISP Metronet UK Gobbles Rival M247 for £47.5m

Alternative business ISP Metronet UK, which has built its own hybrid fibre optic and wireless broadband networks’ in several urban areas around the United Kingdom, has today acquired rival provider M247 for £47.5 million.

At present Metronet UK, which is backed by mid-market private equity firm Livingbridge who invested in the ISP during June 2014 as part of a £45m secondary buyout, employs 150 people across two sites in Manchester and works with over 2,500 businesses (e.g. Intu, Sofology and ao.com). Overall they delivered a respectable turnover of £21.5 million in the financial year to 2016.

However the ISP intends to keep growing and thus they’ve gobbled M247 as part of a new “targeted buy and build strategy,” which will enable them to offer a combined portfolio of connectivity and content services including wireless network services, datacentres and managed hosting solutions across the UK and Europe. The combined business will have three datacentres, over 200 staff and EBITDA in excess of £12m million.

Lee Perkins, CEO of Metronet UK, said:

“M247 is an excellent fit for us as it provides the scale and reach to build upon our existing momentum and the expertise and infrastructure to provide richer solutions to our combined customers. In addition to further acquisitions of similarly high quality businesses to M247, we are making significant investments in our systems and people to facilitate a smooth integration for our customers and to support further organic growth.”

Matthew Caffrey, Partner at Livingbridge, said:

“This is a fantastic step forward for Metronet (UK) as it continues to expand its footprint across the UK and eventually into Europe. This acquisition is the start of a journey to build an international, multi-offering internet service provider and hosting business and we are delighted that M247 will be part of that process. Metronet (UK) has an exciting time ahead as it actively looks for similar acquisition opportunities and we look forward to seeing the business build on its success to date.”

David Buckle, Managing Director at M247, said:

“We have known the Metronet (UK) team for some time and feel they are a perfect fit for our business. They are the ideal home for M247 and we are extremely excited about what the future holds for our combined businesses.”

The move represents good news for the business, although no doubt M247’s existing customers will be keeping a close eye on the development. It’s not uncommon for such acquisitions to result in disruption for existing customers, with the potential for prices, service features, support and contract terms to change.