CITYFIBRE ACQUIRES LIT FIBRE, ACCELERATING ITS ROLLOUT BY UP TO 300,000 PREMISES

• CityFibre has agreed to acquire alternative fibre network operator Lit Fibre from Newlight Partners.
• Integration of Lit Fibre will add up to 300,000 premises to CityFibre’s Ready For Service footprint, comprising over 200,000 passed homes and up to 100,000 further premises in planned network rollouts.
• The acquisition will provide CityFibre’s partners with the same market-leading products, pricing and service experience across its extended, carrier-grade, network footprint.

CityFibre, the UK’s largest independent full fibre platform, has agreed to acquire alternative fibre network (altnet) Lit Fibre (Lit) from Newlight Partners, accelerating its nationwide full fibre rollout by up to 300,000 premises as part of its 8m rollout programme. The share-based acquisition will see Newlight Partners become minority shareholders in CityFibre and is expected to be completed in the second quarter of 2024.

Lit is a vertically integrated altnet, comprising a network builder and Internet Service Provider (ISP). It has a current footprint of over 200,000 premises across more than 20 towns in Wiltshire, Gloucestershire, Hertfordshire, Worcestershire, Essex and Suffolk, and serves a rapidly growing subscriber base of more than 9,000 retail customers.

The acquisition of Lit is the first of several deals CityFibre expects to close over the next two years and follows CityFibre’s decision to pursue altnet acquisitions as a strategic growth driver towards and potentially beyond its 8m premises target, cementing its position as the UK’s leading wholesale competitor to BT Openreach.

CityFibre will begin to rapidly integrate Lit’s infrastructure into its nationwide, carrier-grade network, including its passive, active and operational support systems. The integration is expected to be completed later this year, from which point ISPs will be able to access the same market-leading products, pricing and service experience across the extended footprint.

Lit has a significant and complementary network footprint which has been deployed to a high standard and uses compatible 10Gbps XGS-PON network architecture. These attributes will help accelerate the speed at which CityFibre is able to integrate Lit’s network and make it available to partners, while proving CityFibre’s ability to maintain the high-quality service it provides its customers.

CityFibre intends to complete Lit’s work-in-progress deployment as well as the majority of its planned network rollouts. Lit is currently on track to deliver up to 100,000 further premises by early 2025. Its network is built exclusively using existing poles and ducts and benefits from a highly attractive build cost per premises.

CityFibre will prioritise Lit’s swift network integration. The full fibre broadband services enjoyed by its customers will not be affected as a result of the transaction. As a wholesale-only operator, CityFibre will explore options for the retail ISP following the integration of the network.

CityFibre has a strong history of successful acquisitions including KCOM and Redcentric’s national network assets, as well as Entanet and FibreNation. This provides CityFibre with the experience required to rapidly integrate and commercialise acquired assets.

Greg Mesch, Chief Executive Officer at CityFibre, said: “Our self-build rollout programme has already delivered more than 3.5m premises to our partners and we’re excited to accelerate this even faster through targeted acquisitions like Lit Fibre. But competition is not just about scale, it’s about providing partners access to carrier-grade networks that reduce their costs to serve and improve the service experience they can provide their customers.

“The UK market needs a third infrastructure platform of scale to ensure competition matures and that it continues to deliver for consumers and the country. Our acquisition of Lit is a clear demonstration of our intent to establish CityFibre as the core of that third platform.”

Joshua Ho-Walker, Partner at Newlight Partners, said: “We are incredibly proud of Lit Fibre’s success in bringing world-class fibre broadband to towns across the UK. This acquisition is an exciting milestone, and we look forward to becoming a shareholder in CityFibre and continuing to help build the UK’s leading full fibre wholesale platform.”

Tom Williams & Ben Bresler, Co-Founders at Lit Fibre, said: “We are delighted that CityFibre has decided to acquire Lit Fibre, the first in their new targeted acquisition strategy. Just over three years ago we established Lit to bring internet connections of the highest quality to towns across the UK. Along with our team we’ve been successful in building an enviable reputation for quality and customer service that our customers rate highly.

“Our efficient build model and reputation for excellent quality and service has been recognised by CityFibre and we’re looking forward to working with them in the coming months to complete the deal.”

Houlihan Lokey acted as financial advisor to Lit Fibre on the transaction. EY supported CityFibre with financial due diligence on the transaction. Weil, Gotshal & Manges LLP acted as legal advisor to Newlight Partners, Bristows LLP acted as legal advisor to CityFibre, and Stevens & Bolton LLP acted as legal advisor to Lit Fibre. Cartesian acted as integration advisor to CityFibre.

Notes to Editors:

• Lit Fibre is currently available in Midsomer Norton, Radstock, Redditch, Melksham, Harpenden, Sutton Coldfield, Chippenham, Cirencester, Evesham, Clacton-on-Sea, Bishops Stortford and Sudbury, with installation underway in St Albans, Chelmsford, Welwyn Garden City, Stratford-Upon-Avon and Potters Bar.
• Deal brings further experienced and sophisticated investors into the CityFibre shareholder register. Newlight Partners were early investors in Hyperoptic and their current investment portfolio includes metro and long-haul fibre specialists euNetworks.