There has been an interesting fiber M&A move over in the UK. The metro fiber challenger CityFibre has agreed to a $750M buyout.
The buyer is a consortium led by Goldman Sachs’ West Street Infrastructure Partners and the private equity firm Antin, which will pay 81 pence per share, a 93% premium. The end result will have CityFibre taken private, with long term funding for the company’s growth to come from the company’s new backers and connections rather than from shorter term public market sources.
CityFibre has business fiber and FTTH projects going on in markets across the UK, and funding all those efforts has been getting complicated. CityFibre generated £34.8M in revenue last year upon which it earned £4.5M, so by most measures the consortium is paying a hefty premium. But CityFibre has a lot of balls in the air, each of which has a lot of long term potential — enough that Goldman and friends consider the price to be attractive.
Just how quickly the new funding comes in and gets put to work should be an interesting story to watch over the next few years.
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