CityFibre Completes UK Fibre Broadband Acquisition of Lit Fibre
Gigabit broadband builder CityFibre has today announced the completion of their recent share-based acquisition deal for alternative network provider and UK ISP Lit Fibre (here), which adds another 220,000 premises to their existing full fibre coverage (i.e. a predicted total of c.3.8 million or c.3.5m RFS) – rising to 300k once existing builds complete in 2025.
At present CityFibre’s wider ambition remains to cover up to 8 million UK premises (funded by c.£2.4bn in equity, c.£4.9bn debt and c.£800m of BDUK subsidy) – or around 30% of the UK (here), although it’s unclear precisely when that will now be achieved (it was originally a goal for the end of 2025). But as previously reported, the operator is currently also aspiring to add up to another 1.5-3 million premises through mergers and acquisitions (M&A) over the next couple of years, with Lit Fibre being one of their first targets.
CityFibre typically sells packages via various broadband ISPs (e.g. TalkTalk, Vodafone, Zen Internet etc.) and will now, as a result of the Lit Fibre deal (estimated to be valued at around £80m), also be able to cater for premises across 20 towns in Wiltshire, Gloucestershire, Hertfordshire, Worcestershire, Essex and Suffolk.
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CityFibre now intends to complete Lit’s work-in-progress deployment, as well as the majority of its planned network rollouts. In total, the network is expected to reach up to 300,000 premises by “early” 2025, which will then be added to CityFibre’s total coverage footprint.
Greg Mesch, Chief Executive Officer at CityFibre, said:
“We’re delighted to have concluded our acquisition and we’d like to welcome everyone at Lit to the CityFibre team. We’re also pleased to welcome Newlight Partners, with their deep understanding of the fibre infrastructure market, as our newest CityFibre shareholders.
“We’ve already been working hard with the great team at Lit to ensure that its network is integrated quickly as our partners are excited to begin marketing over the new footprint. This is a great opportunity for us to hone our integration capabilities as acquisition becomes an increasing accelerant to our 8m plan.”
Joshua Ho-Walker, Partner at Newlight Partners, said:
“We are excited to be CityFibre’s newest shareholder and we look forward to helping bring CityFibre’s market-leading, full-fibre platform to 8m homes in the UK. This acquisition is important recognition for the high-quality business that Lit Fibre built and we are grateful for the Lit Fibre team’s hard work and dedication over the past few years.”
The remaining challenge is in the issue of separating Lit Fibre’s retail ISP business (10,000 customers) from their network side (vertical integration), since CityFibre is normally a wholesale-only provider and won’t want to be competing with their existing retail partners. But for now, Lit Fibre’s brand will be retained, although CityFibre have said that they will “explore options for the retail ISP following the integration of the network.”
Fully integrating Lit Fibre’s network into CityFibre’s is expected to take about 6 months, and officially they probably won’t be able to count this as part of their total coverage until this phase completes. But after that it’s plausible that we may see some divestment of Lit Fibre’s customer base or retail brand to a new owner on the same network.
Newlight Partners has also become a minority shareholder in CityFibre, where they will join major shareholders such as Antin Infrastructure Partners, Goldman Sachs Asset Management, Mubadala Investment Company and Interogo Holding.
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Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on X (Twitter), Mastodon, Facebook, BlueSky, Threads.net and Linkedin.
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What is “completes acquisition” meant to mean? I am commenting from my Lit Fibre connection and the CityFibre website says my area isn’t planned.
Is this the standard CityFibre practise of making announcements far in advance of them having completed the work?
It marks the completion of the deal and any regulatory approvals. CityFibre now formally owns LitFibre, but just like all such deals, it will take c.6 months to physically integrate the networks. This is pretty much the same process for all similar M&As.
Next on Cityfibre’s acquisition list – Allpoints Fibre.
That, or I could see AllPoints Fibre being bought by Netomnia / YouFibre.
Oh please, I hope not.
I dread to think Cityfibre could make me redundant again or even worse I could end up working for Cityfibre again! 🙁
What a shame, it seemed as if we were getting somewhere with more choices for people and then another giant comes along and start grabbing networks, VM is as bad as bloated toad/Out of reach.
Not sure what relevance this article has to VM or BT?
I wont be surprised if we see more consolidations over time, worst case I hope we at least get to a point where most people have a choice of at least two or three suppliers for the physical network so there’s at least some competition there.
Depends what you call choices. At the minute you have a postcode lottery as to what you can get. To me the idea that you have 3 national networks competing for wholesale customers who are themselves competing for retail customers seems more beneficial than a hotchpotch of random networks. With VMO2/Nexfibre going wholesale if I end up with a choice of retail ISPs providing through Openreach, VMO2/Nexfibre and Cityfibre that is fine by me.
@Anon, the relavence is that it is yet another large company taking over smaller ones, like Bt did with Plusnet or even EE, VM via its cityfibre network seems to be trying to grab smaller networks. We will be back to down to having less choice again.
@phototech3475, I expect more will be taken over, which is pretty sad to be honest. We have two here at the moment Out of reach and Zzoomm, I doubt very much if we will see a third to be honest, well not as things are, the city would have to grow a lot more.
@Big Dave, you are right it is a postcode lottery, even in the city I live, we have Openreach and Zzoomm and not all parts of the city can get both, I expect it will change in time, Zzoomm is almost to the end of the build here I think, no idea how far Openreach is, but I do know there are still places even on one of the largest estates here where people still can’t get FTTP via Openreach.
I doubt very much if I would go for CityFibre if it ever came here. As i have said before, the only time I will move from Zzoomm now is to go back on FTTC, or if they did something that really annoyed me, and then I would still go back to FTTC. I can’t be bothered with the hassle of having another FTTP network installed.
Ad47uk: “VM via its cityfibre network”
Why do you keep on as though VMO2 or the closely related Nexfibre have bought CityFibre? There were rumours a year ago that they might be in talks, that’s all gone nowhere. Whilst officially denied, I’d expect that informal discussions were had around an indicative deal value, and CF owners decided that they’d be better off holding out for more, and VM/Nexfibre weren’t willing to start formal talks with the sort of value CF investors might take.
This sort of thing goes on all the time in corporate strategy and finance teams, so the rumour means nothing. Maybe a deal will be done in future, but for now CF remain independent.
@Andrew G, oops, my mistake, yes I keep getting them two mixed up. Yeah, it is Nexfibre that belongs to VM, ignore all I posted apart from larger companies buying up smaller ones to give us less choice.
Every one of these deals means the cityfibre management teams walks away with less money when its sold. Wonder how many more they can stomach.