The company is making a share placing – fully underwritten – to raise £185 million and it has made an offer for subscription to raise a further £15 million.
CEO Greg Mesch said: “We are building gigabit Britain, driven by growing demand from internet service providers and their customers to switch to full-fibre infrastructure.”
With the new money CityFibre plans to go nationwide with its fibre-to-the-home (FTTH) project that it has already tried out in York. “Our announcement to enter the residential market is the first step in our vision to bring gigabit connectivity to millions of UK homes and small businesses,” said Mesch. “This is about more than just better broadband – this is about future-proofing the digital infrastructure we’ve all come to rely on at work, at school, at home and in our communities.”
The company has wholesale fibre metro networks in 42 UK towns and cities, but these will be extended into FTTH projects following the York trial, and the network itself will be expanded into “not less than 50 towns and cities by 2020”. The York project was built in a joint project with Sky and TalkTalk.
At the same time CityFibre has bought Entanet, a wholesale carrier with data centre space at Interxion in London, Equinix in Slough and at its own headquarters in the English midlands.
Mesch said: “With Entanet now part of the CityFibre family, our combined offering will accelerate the take-up of services over our growing network footprints, leveraging Entanet’s enviable channel partner network and continuing to transform digital connectivity for thousands of UK businesses.”
Entanet partners with Google, Apple, Amazon, Microsoft, Sky, Akamai, Janet, the BBC and BT, among others.
CityFibre said Entanet “will substantially increase the company’s wholesale capabilities and its relationships with service providers, thereby extending CityFibre’s channels to market. By combining CityFibre’s fibre infrastructure with Entanet’s established wholesale products, systems and relationships with channel partners, the company expects to realise synergies of over £3 million per annum within three years.”
CityFibre says the £185 million share placement is fully underwritten by Citigroup, finnCap, Liberum and Macquarie, “with the intention to raise further proceeds through an accelerated bookbuilding process which will be launched immediately following this announcement”.
In addition, the company says it intends to raise further gross proceeds of up to £15 million through a non-underwritten offer for subscription.
The company expects to publish a prospectus next Tuesday, 11 July.
