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The deal would value CityFibre at around £2 billion, with the company poised to ramp up their efforts to take on rivals BT and Virgin Media
UK alternative fibre company CityFibre could be on the brink of securing a major investment that could have a significant impact in their growing rivalry with BT and Virgin Media.
According to sources speaking to the Financial Times, Abu Dhabi sovereign wealth fund Mubadala Investment Company and Interogo Holding, best known for owning Ikea, are together planning to take stakes in CityFibre worth a combined £1 billion.
This deal would value CityFibre itself at around £2 billion – impressive growth from the altnet, who was bought by a Goldman Sachs-led consortium back in 2018 for around £500 million.
Even more exciting is the fact that these new potential investors may not be alone, with sources suggesting that there are several additional investors also in talks with CityFibre regarding a £500 million stake in the company.
According to sources, the deal could close next month.
CityFibre is currently in the midst of a £4 billion fibre rollout, aiming to connect 8 million homes and 800,000 businesses with full fibre by 2025. Earlier this year, in March, the company said it had already passed 650,000 homes.
While CityFibre’s growth is undeniably impressive, it still has some way to go before it can directly challenge the hegemony of BT and Virgin Media. In May, following favourable regulatory changes from Ofcom, BT increased its fibre-to-the-premises (FTTP) target from 20 million homes to 25 million by 2026, accelerating its fibre deployment to 4 million premises per year.
Virgin Media, meanwhile, following its merger with O2, is currently rolling out fibre of its own, as well continuing to upgrade its existing network to gigabit-capable tech. Earlier this month, the company said that over half of its network of 15.5 million homes now had access to gigabit-capable broadband. They plan to add another 7 million homes to their FTTP network over the next five years, as well as upgrade the rest of their network to DOCSIS 3.1 technology by the end of the year.
Exactly how fast CItyFibre can continue to accelerate to keep the pace with these giants remains to be seen. Nonetheless, if investor interest of this magnitude continues to bear fruit, the altnet will soon fully establish itself as the UK’s third major fibre power.
CityFibre’s CEO Greg Mesch will be giving a keynote presentation at the upcoming Connected Britain conference happening live next month in London. For more information and to grab your ticket, click here!
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