Fiber M&A: CityFibre Acquires KCOM’s Network

The UK saw some further network consolidation this morning that is worth noting.  CityFibre has announced an agreement to acquire the national network footprint of KCOM, although not including the latter’s core Hull and East Yorkshire network assets.

The deal significantly expands CityFibre’s national reach by both adding additional metro reach and providing an intercity piece that will help start to hook its various metro fiber projects together.  The KCOM network assets being bought include metro assets of 1,100km of duct and fiber across 24 markets and another 1,100km of intercity fiber.

That will put CityFibre in 36 markets nationally, with the footholds necessary to expand that number to 50 by the end of the decade.  And with the national  reach, they take one more step towards meeting BT wholesale eye to eye in the marketplace.

KCOM had been backing away from the costs associated in running a fiber network for some time.  Back in 2009 they outsourced the operation of the network to BT.  Now they’ll take that one step further, becoming simply a customer on that network footprint at a cost of about £5M annually for at least 5 and up to 15 years.

CityFibre will pay £90M to acquire KCOM’s network infrastructure.  To close the deal and then follow up on fully commercializing the assets, they have arranged to raise £180M.  Of that, £80 is in the form of new equity and £100M is in the form of debt facilities.

Of all the European fiber infrastructure markets, the British Isles has probably seen the most M&A activity in the last few years among competitive providers.  Zayo has bought Geo and Viatel, Interoute bought the Vtesse Group’s assets, Vodafone bought out C&W Worldwide a few years back, and euNetworks recently acquired Inland Fibre over in metro Dublin.  Some of those aren’t solely British and Irish fiber of course, but it is definitely a commonality they all share.

 

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Categories: Fiber Networks · Mergers and Acquisitions · Metro fiber