ITS Technology’s UK Full Fibre Rollout Gets £100m Funding Boost

The ITS Technology Group, which runs 36 wholesale full fibre broadband and Ethernet networks (“Faster Britain“) across urban parts of the UK for businesses and ISPs to harness, has today announced that they’ve secured £100m of debt financing from global investment firm Avenue Capital Group to help support their plans.

The new investment, which complements the £145m secured from Aviva Investors in previous years (here and here), is expected to help with both the expansion of their up to 10Gbps capable XGS-PON network technology and enable the operator to boost growth through new mergers and acquisitions (M&A).

The announcement also highlights “ITS’ growth target for its full fibre network to pass 50% of the UK’s commercial business premises“, although it’s unclear whether they mean this in terms of addressable market reach or actual premises passed. The operator’s prior coverage goal was to “pass 25% (c.500,000) of UK business premises by the end of [2022],” but we haven’t had a solid progress update on that.

Daren Baythorpe, CEO at ITS, said:

“We’re really excited to welcome our new investor, Avenue Capital Group. This additional funding recognises the strength in our business plan as we continue to expand our network, as well as consider strategic acquisitions, as the fibre market adapts to changing technology and undergoes consolidation.

Following last year’s follow-on investment from Aviva Investors and the acquisition of NextGenAccess, we have worked with our partners to drive connections with both businesses and with public sector organisations. In addition, we’ve had a strong focus on service, investing in systems and delivery to drive improved experience, providing agility and assurance alongside our business growth.”

Jonathan Ford, Head of Europe Strategy at Avenue Capital, said:

“We’re delighted to be supporting ITS’ business-to-business fibre rollout in the UK. The company’s management team not only has very deep industry relationships to execute on their business plan, but it has also coupled it with a strong delivery track record. This funding fits well with our European strategy of investing in high quality companies with sustainable business models.”

Greenhill acted as corporate finance advisors on the transaction with Dow Schofield Watts, Sullivan & Cromwell LLP provided legal advice, and RSM were tax advisors.

UPDATE 8:46am

According to ITS’s website, the operator has “built our Faster Britain network to pass nearly 450,000 UK business premises with an ambition to pass 1 million in the next few years,” although we’re still not sure if they mean premises passed or addressable market. In any case, this figure doesn’t specifically state full fibre coverage (i.e. their wireless networks could be playing a role).

Independent data from Thinkbroadband recently reported that the operator’s full fibre network now covered 185,000 premises (here).