CityFibre is making a move over in Europe this week. The UK wholesale metro fiber operator is raising up to £200M as part of an expansion of its buildout across the country. Simultaneously, they have announced an acquisition as well.
CityFibre has bought Entanet, a wholesale communications provider with a channel ecosystem of some 1,500 partners. Entanet operates a national MPLS network over which it offers a variety of voice and data services. They also have colo space in Interxion in London and in Equinix out in Slough. With the acquisition, CityFibre adds a complementary wholesale suite of products and a channel ecosystem that it hopes to augment with its national fiber presence.
The deal cost CityFibre £29M in cash. They expect to realize £3M in annual cost synergies.
On the capital front, CityFibre has announced the placement of 336 million shares at $0.55 per share, raising at least £185 and increasing the company's share count by 126.6%. An additional £15M may be raised through over-subscription.
In addition to funding the acquisition, those funds will go toward additional organic expansion. CityFibre plans to add 8 more markets to its UK footprint by 2020 and hopes to start on FTTH projects in 5-10 of its markets next year. The FTTH projects follow the company's participation in such a project in the northern English city of York.
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