A group of investment funds backed by Goldman Sachs has made a £538 million ($730 million) bid for UK broadband specialist CityFibre, which is building fiber networks in competition with BT and Virgin Media in UK towns and cities.
The offer values CityFibre at a 93% premium to its closing share price of £0.42 ($0.59) on April 23. Boosted by today's news, CityFibre's share price was trading up nearly 89% in London at the time of publication.
A takeover by the investment companies could help CityFibre to speed up its rollout and put further pressure on the UK's broadband incumbents.
"Your board believes that this transaction … is a good solution for CityFibre's long-term funding," said Chris Stone, CityFibre's chairman, in a statement on the proposed deal. "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-premises] deployment. This will strengthen the company's ability to deliver on its vision to provide full fiber infrastructure to 20% of the UK market."
Unlike BT Group plc (NYSE: BT; London: BTA), CityFibre operates exclusively as a wholesale business, selling connectivity services to retail operators that serve business and residential markets. Founded in 2011, it focused initially on addressing business needs but has recently expanded into the residential sector through a high-profile deal with Vodafone.
The two companies last year said they would invest up to £500 million ($697 million) in bringing full-fiber connections to 1 million UK homes by 2021. They have already embarked on projects in Milton Keynes, Peterborough and Aberdeen and today said that Coventry, Edinburgh, Huddersfield and Stirling are next in line for fiber rollout. Ultimately, the companies hope to bring fiber networks to about 5 million homes by 2025. (See Vodafone, CityFibre Take Their Gig to Concrete Cowland.)
The full realization of those plans could be transformative for the UK economy, giving about a fifth of the population a major infrastructure alternative to BT and cable operator Virgin Media.
Vodafone UK has previously relied on wholesale arrangements with BT to provide broadband services. Like other such companies, however, it has complained about the service levels it gets from Openreach, BT's infrastructure subsidiary, as well as the incumbent's reliance on copper-based broadband technologies, which deliver lower-speed connections than all-fiber networks.
Under pressure from regulatory authorities and rivals, Openreach this year said it would extend full-fiber networks to about 3 million UK premises by 2020, up from an original target of 2 million. Elsewhere, it aims to use a copper-fortifying technology called Gfast to serve another 10 million homes. BT reckons Gfast will support 300 Mbit/s for most homes, but this remains well below the gigabit speeds that may come with fiber.
Today's takeover news will add to the pressure on Openreach to build full-fiber networks for an even bigger share of UK homes. The operator has talked about extending fiber to as many as 10 million premises by the mid-2020s if the regulatory environment is favorable. It has previously complained about having to provide network services to rivals at prices it deems too low.
The consortium behind today's offer, which needs to be approved by CityFibre shareholders, includes Antin Infrastructure Partners, a European private equity firm that has raised £7.4 billion ($10.3 billion) in capital, as well as West Street Infrastructure Partners, a fund managed by Goldman Sachs.
It came on the same day that CityFibre announced a 126% increase in revenues last year, to £35 million ($49 million), and a widening of its net loss to £16.6 million ($23.2 million), from £12.6 million ($17.6 million) in 2016.
As Vice President of Global Healthcare at AT&T, Maria Lensing oversees the telecommunications operator's technology and professional services offerings across the spectrum of medical providers, from solo practitioners and walk-in clinics to giant hospital chains, medical-device vendors and consulting firms. Lensing also sees more interest from traditional service providers -- cable and telecom operators looking to expand or build relationships with their own medical communities, perhaps as an adjunct to smart-home successes or standalone.
Lensing, who took on this role almost a year ago in May 2018, oversees both the sales and technical teams responsible for developing growth initiatives for AT&T's Global Healthcare business -- including products, services and industry-specific solutions. She also very actively promotes business minority inclusion, education and female empowerment programs and has been recognized both within and outside AT&T. Some awards she's received include "Top 40 Under 40" and "Super Woman in Business" from the Memphis Business Journal.
Join Maria Lensing, VP of Global Healthcare at AT&T, on Tuesday, April 23 at 12:00 p.m. ET / 9:00 p.m. PT, when she's the guest on BBWN Radio, hosted by Broadband World News Editor Alison Diana. Register now!
So far, the agenda includes a discussion of technologies such as fiber and 5G; defining the needs and solutions for a widely diverse range of customers; partnering for success in a typically slow-moving, budget-constrained market; learning and dispersing best practices from other verticals and within other business groups; promoting diversity and female empowerment when so many say they're doing so but so little has changed; and what she hopes to accomplish in another year in this role.
Register and post your questions for Maria on BBWN Radio's easy-to-use chat board. We will get to as many questions as possible. Please post questions before and during the broadcast. Once you've registered, you will be led to the chat board page. Talk to you on April 23!
Tune in to Broadband World News Radio on February 14 at 11 a.m. ET / 8 a.m. PT / 4 p.m. UK when John Isch, Practice Director of the Network and Voice Center of Excellence at Orange Business Services, discusses use cases, ROI and misconceptions of software-defined wide-area networks, virtualization and cloud.
Just when you thought the answer to your next technology direction question was clear, the noise around multiple new technology options fills the Internet and airwaves. Multiple 5Gs are being deployed; there's CableLabs' 10G initiative; the ITU and IEEE are toiling around 50G PON – and we haven’t even talked about Wi-Fi6 yet! Is any of this real, do you have to pay attention or can you just let the dust settle and then decide?
Since waiting is often not the best option, let’s demystify technology options, their impact on your business, and how to prepare for whatever the future brings.
In this webinar, Service Providers will learn:
Current state of 5G and how it affects everyone, not only mobile network providers.
Latest technologies being developed and how they will benefit their networks and subscribers.
How to prepare their networks for the future – whatever it may hold.