CityFibre, the fibre-optics broadband infrastructure company, which is building networks in Glasgow, Aberdeen, Edinburgh and Stirling, has agreed to a £538 million ($750m) takeover deal.

A consortium of infrastructure funds will pay investors 81p a share, a 93% premium on the closing price on Monday April 23 2018.

Antin Infrastructure Fund, a specialist fund with €7.4 billion of capital, has partnered with Goldman Sach’s-backed West Street Infrastructure Funds, to make the bid, which already been accepted by around 60% of shareholders.

Following the news, shares in CityFibre climbed 89% at market open.

A Vision for The Future

CityFibre CEO Greg Mesch said: “It’s a year in which we moved a step closer to realising our long-held vision of a full-fibre future across the UK.

“We continued to make significant headway within the public sector market and we now are well-positioned to benefit from a more supportive public policy environment.”

CityFibre recently completed a major deal with Vodafone to bring fibre-to-the-premises (FTTP) infrastructure to up to five million premises across the UK.

Mesch described the deal as the “most significant alternative communications infrastructure development in the UK in at least 30 years.”

Better Alternatives

Chris Stone, chairman of CityFibre, said the takeover “represents compelling value for CityFibre’s existing shareholders and is also a good solution for CityFibre’s long-term funding.”

The news came as CityFibre announced turnover increased by 126% to £34.8m in 2017.

Graeme Gordon, the CEO of IFB and Chair of ScotlandIS welcomed news of the takeover, telling DIGIT: “It looks like a great investment in a fantastic company.

“CityFibre’s initial partnership and investment in Scotland with IFB in Aberdeen has pioneered, led and helped accelerate ultrafast fibre to the premises and pure fibre connectivity across the city, Scotland and much further afield.

“The funding capacity brought about by the deal will only increase partner and customer choice in service spend and cost, providing better alternatives for everyone.”

Ricky Nicol, the CEO of Commsworld, told DIGIT: “As City Fibre’s premium partner in Scotland I am hugely encouraged and indeed excited with the announcement today from CityFibre of their acquisition by the Goldman Sachs Consortium.

“This is, in my opinion, brilliant news for the UK as a whole and further accelerates the full fibre Strategies so desperately needed to grow our economy and build a truly digital platform for the future.”

Glasgow City Fibre

In December CityFibre announced the expansion of its Gigabit City network in Glasgow to reach 506 Glasgow City Council owned sites in an agreement with a lifetime value of £15.7m over 19 years, the company’s largest-ever public sector deal.

Key sites to benefit from the investment will include schools, libraries, leisure centres, arts venues and council offices. The network will also be open to CityFibre’s 1,500 partners to provide connections to over 17,000 businesses throughout the city.

Vodafone and CityFibre have identified the next wave of towns and cities to benefit from a roll-out of ultra-fast, Gigabit-capable full fibre broadband. Residents and workers in Coventry, Edinburgh, Huddersfield and Stirling will be next in line to have their online experience transformed.

Gigabit Cities Expansion

In addition CityFibre and Vodafone have just announced that Coventry, Edinburgh, Huddersfield and Stirling will be the next cities to benefit from the company’s full-fibre gigabit-enabled infrastructure.

Alongside previously announced cities, Milton Keynes, Peterborough and Aberdeen, this makes a total of half a million premises across seven cities, which will benefit from Gigabit broadband speeds. It also brings CityFibre’s committed infrastructure investment in the project to at least £315 million.