ITS, the UK’s leading business fibre network provider, has secured £100 million of debt financing from global investment firm Avenue Capital Group.

Together with the significant existing facility provided by Aviva Investors, the global asset management business of Aviva PLC, this investment further underpins the delivery of ITS’ growth target for its full fibre network to pass 50% of the UK’s commercial business premises. The £100 million of funding will also be available alongside the existing facility to finance strategic M&A activity.

Following strong growth over the past five years, ITS has established itself as a national full fibre infrastructure operator, building a robust, reliable network with industry leading technology, bringing a gigabit-capable full fibre network to UK businesses. With a dedicated channel focus on B2B fibre, ITS now has the largest business fibre footprint outside of the incumbents.

ITS’ infrastructure supports symmetrical services up to 10Gbps using XGS-PON technology, providing open access to a network of more than 500 partners in the UK, and supporting some of the UK’s most progressive business and public sector bodies.

Daren Baythorpe, Chief Executive Officer at ITS, said: “We’re really excited to welcome our new investor, Avenue Capital Group. This additional funding recognises the strength in our business plan as we continue to expand our network, as well as consider strategic acquisitions, as the fibre market adapts to changing technology and undergoes consolidation.

“Following last year’s follow-on investment from Aviva Investors and the acquisition of NextGenAccess, we have worked with our partners to drive connections with both businesses and with public sector organisations. In addition, we’ve had a strong focus on service, investing in systems and delivery to drive improved experience, providing agility and assurance alongside our business growth.”

Jonathan Ford, Senior Portfolio Manager and Head of Europe Strategy at Avenue Capital, said: “We’re delighted to be supporting ITS’ business-to-business fibre rollout in the UK. The company’s management team not only has very deep industry relationships to execute on their business plan, but it has also coupled it with a strong delivery track record. This funding fits well with our European strategy of investing in high quality companies with sustainable business models.”

Darryl Murphy, Head of Infrastructure, Aviva Investors, said: “It is encouraging to have secured funding into ITS from Avenue Capital which, alongside existing investments made by Aviva Investors, will enable the business to maximise its potential. We have been pleased with the performance of ITS to-date and this latest injection of capital will provide it with the ability to fulfil its future growth plans, as part of a critical sector for delivering the UK’s digital evolution.”

Greenhill acted as corporate finance advisors on the transaction with Dow Schofield Watts, Sullivan & Cromwell LLP provided legal advice, RSM were tax advisors and Analysys Mason provided commercial and technical due diligence .

Media contact:

Deborah Simcock 

deborah.simcock@itstechnologygroup.com

M. 07801 443022

Wholesale full fibre provider ITS Technology Group has today announced it has completed the acquisition of dark fibre specialist NextGenAccess Ltd.

The deal adds 455km of dark fibre across Greater London, Newport, and South Essex to complement ITS’ existing full fibre footprint which is on track to pass 25% (c.500,000) of UK business premises by the end of this year. Alongside ITS’ strong organic growth and positive EBITDA position, the acquisition kickstarts its ‘build and buy’ strategy following its second round Aviva infrastructure funding which secured a further £100m in April this year.

ITS designs, builds and operates wholesale full fibre networks known as ‘Faster Britain’ in the marketplace. It has built a substantial partner offering which includes an industry-leading self-service search, quote and order portal and APIs giving access to gigabit-capable full fibre solutions to any business across the country.

The additional footprint provided by the acquisition of NextGenAccess, coupled with the highly experienced senior management team and staff, and the significant enhancement to the portfolio of dark fibre services, further enriches what ITS can offer to its channel partners and their customers.

The acquisition will also allow ITS to grow its presence in the data centre connectivity marketplace, further developing NextGenAccess’ impressive proposition. As a provider of ‘trunk’ connectivity, NextGenAccess has high levels of trust alongside high standards of delivery in this space, which is seen as a key growth area for ITS.

“NextGenAccess is an extremely capable and exciting business with a very talented team that I am delighted to welcome onboard. There are significant synergies between our two businesses. In addition to the fibre assets in the ground and portfolio of solutions, the experience that this team will bring to ITS will allow us to substantially bolster our dark fibre credentials. This will allow us to deepen our relationships with carriers, telecom operators, service providers, and resellers. This will also further accelerate our full fibre rollout and reach as we play our part in creating a Gigabit Britain.

“We’re excited to expand our own data centre offering by developing NextGenAccess’ existing proposition in the space, as well as opening new opportunities on the network to deliver Layer 2 and 3 services to our partner community.

“The acquisition of NextGenAccess adds depth to the innovative and business enhancing services we offer to our partners and their customers, cementing our place as one of the leading wholesale fibre providers in the UK. I’m really excited for this next phase of our business.”

Daren Baythorpe, CEO of ITS Technology Group

“Following a successful period of growth, backed by Amber Infrastructure since 2018, the time is right to take the next step and allow our partners and their customers to benefit from our significant joint capability and experience in the full fibre market. We are all very pleased that the ITS values and culture are extremely close to those already present within NextGenAccess which should make the integration of the businesses seamless.”

“I am looking forward to being part of the ITS team and further helping the group to develop and deliver a leading full fibre portfolio.”

Mark Weller, Managing Director at NextGenAccess

“We have worked closely with the NextGenAccess management team to develop the business since our investment in 2018. The combination of NextGenAccess with ITS enhances their footprint and gives significant joint capability and experience in the UK enterprise fibre market, helping to further accelerate the combined group’s planned fibre deployment.”

Chris Hogg, Senior Investment Director at Amber Infrastructure

Dow Schofield Watts provided Corporate Finance Advisory and FDD support for the transaction for ITS and Hill Dickinson provided legal advice. Commercial market due diligence conducted by Analysys Mason. Lincoln International LLP was financial advisor and Bird & Bird LLP was legal advisor to NextGenAccess on the transaction

Since securing the first round of funding from Aviva Investors in early 2020, ITS has significantly increased its network footprint, known as ‘Faster Britain’ in the marketplace, delivering rich full fibre infrastructure to business dense areas where there is pent up demand for Gigabit-capable services.

Building on its indirect wholesale model, ITS’ Faster Britain partner programme has also grown substantially, with more than 300 Reseller, Internet Service Provider, and Managed Service Provider partners now able to access and provide Faster Britain Gigabit-capable connectivity to end-users. As a result, ITS has tripled its revenues year on year, and was EBITDA positive in FY21, a strong financial position it will build on again this year.

“I am delighted to extend our partnership with Aviva Investors. We have made significant progress over the last two years, building a highly skilled team, scalable delivery capabilities, and creating a substantial full fibre footprint. This further commitment will enable us to continue to rollout our open access wholesale digital infrastructure at pace, giving more businesses access to the connectivity solutions they need to underpin their operations. ITS can now connect any business in the UK via our partnerships with key operators and using our own Faster Britain networks which we are continuing to build out across business dense locations in major towns and cities. We have also invested heavily in developing the systems that allow our partners to easily access high quality full fibre connectivity through our wholesale platform.”

Daren Baythorpe, CEO of ITS Technology Group

“We are very pleased to continue our relationship with ITS and to support the extended rollout of its fibre networks across the UK. There has been a huge structural shift in data usage in recent years which continues to accelerate, and the continued investment in digital connectivity is fundamental to supporting how society functions today and tomorrow. ITS has made significant progress and outlined a clear vision to address this need. Combined with a strong team and expertise, we think this presents a compelling investment opportunity and look forward to working in partnership with them.”

Sean McLachlan, Senior Director, Infrastructure, at Aviva Investors

ITS reuses existing infrastructure, or a ‘dig once’ approach, to build its full fibre networks which avoids the unnecessary disruption of road digs and minimises the impact on local communities. It can install end-user Faster Britain connections far quicker than the industry norm, often in days. Using the latest XGS-PON technology across its networks allows ITS to remotely scale and flex its service offering from basic broadband all the way to 10Gbps Ethernet leased lines.

Dow Schofield Watts acted as sole financial advisor on the transaction, RSM as tax advisors, and BDB Pitmans LLP provided legal advice.

¹Data source: ‘Ordinance Survey OS Open UPRN’ data set

A pair of North West based internet providers have joined forces in a deal worth up to £15m as they bid to take on the UK’s broadband market and bring ultrafast connectivity to 500,000 businesses and homes.

Cheshire-based ITS Technology Group and Greater Manchester-based 4^thUtility have this week rubber-stamped a new eight-year partnership that paves the way for the duo to accelerate the rollout of commercial grade fibre broadband.

With 4^thUtility investing £15m into the project, the two companies plan to provide 100,000 homes with ultrafast connectivity in the next 12 months, rising to half a million within three years.

4^thUtility, which recently received a long-term £25m investment from DIF Capital Partners, work with residential landlords, property developers and house builders to install and upgrade their properties with full fibre connectivity.

Meanwhile, ITS design, build and operate gigabit capable full fibre digital networks, often re-using existing infrastructure which drastically speeds up installations, most taking just a few weeks.

Through its ‘Faster Britain’ full fibre network, ITS and 4^th Utility will help meet the soaring demand for fast internet connections of gigabit capable connectivity.

As the Government promises 100% Gigabit capability by 2025 and with its announcement of Project Speed, the two companies expect to play a key role by rolling out the Faster Britain network across the UK.

“This deal brings together two exciting UK broadband providers and by leveraging the ITS network, we will be able to significantly broaden our reach and the pace of our UK-wide rollout.

“We believe in investing in high-quality fibre infrastructure and we offer a reliable solution that means super-fast full fibre broadband can be ready to go from day one. That’s become more important than ever with so many people across the country now working from home for the foreseeable future.

“We’ll be rolling out thousands of new and retro fit installations in the coming months and we’re pleased to have agreed this long-term partnership that will allow us to deliver our ambitious plans for growth. We’re excited for the future, but we’re only just getting started.”

4^thUtility CEO, Tony Hughes

In September, 4^thUtility revealed a huge recruitment drive that will see as many as 60 new roles created in Greater Manchester to support its UK expansion, with recruitment giant Morson Group providing HR support.

“We’re really excited to be working with 4^thUtility. Our Faster Britain network has been lighting up whole regions of the UK with ultrafast full fibre and this partnership enables us to build more network to more places. The plans we’ve drawn up together are going to improve the digital lives of the homes and businesses we connect.”

ITS CEO, Daren Baythorpe

The partnership between ITS and 4^thUtility goes some way to supporting the broadband pledge which formed a major part of the Government’s election manifesto at the end of 2019. Earlier this year, Chancellor Rishi Sunak confirmed the government would invest £5bn into its plan to roll out full-fibre broadband across the UK.

• Network operator ITS, will use funding from Aviva Investors, the global asset management business of Aviva plc (‘Aviva’), to move into several new areas across the UK to build full fibre networks which will pass at least 200,000[1] premises.
• The partnership with Aviva will also enable ITS to build on its current network footprint to deliver full fibre access to more premises.
• ITS’ networks are ‘open access’, giving wholesale access to internet service providers (ISPs), network and mobile network operators, and IT resellers; designed to underpin the connectivity needs of businesses of all shapes and sizes.

Gigabit network operator ITS, has secured a £45m deal with Aviva Investors, the global asset management business of Aviva plc (‘Aviva’), to fast track its plans to build transformational full fibre networks across the UK.

This investment round will allow ITS to build several new full fibre networks, as well as to build out its current footprint; contributing to the Government’s ‘full fibre to every premise’ agenda.

Operating a wholesale model, its networks give businesses and residential communities access to a choice of gigabit capable connectivity services via a range of ITS partners which include ISPs and resellers. ITS will continue to reuse public and private infrastructure to accelerate the rollout of its networks, and will also collaborate with its partner network to identify where the greatest demand for full fibre services lie in order to prioritise build plans.

“I took over the reins of the business in early 2018 and focused on reshaping the business; strengthening all aspects of our operations and strategic approach. This has created a strong foundation for this next phase of our growth.

“We are really excited to be working in partnership with an investor of Aviva’s calibre. It gives us considerable financial backing to further flex our reuse muscles and continue to take advantage of the opportunities ahead. This approach allows us to connect more customers to full fibre far quicker than the industry norm. With BT’s public switched telephone and copper network switch off plans now in progress, the race to build alternative futureproof full fibre IP-based networks is on to ensure coverage and choice for end-users – ITS is proud to be playing our role in achieving the UK’s ambitious plans.”

Daren Baythorpe CEO at ITS

“Aviva Investors is pleased to support the rollout of ITS’ full fibre broadband network. There is a clear and growing demand for this essential infrastructure across the country. The funding from Aviva Investors will allow ITS and its management team to build on its existing infrastructure and brand to accelerate its network expansion and to provide world-class infrastructure across the country.”

Sean McLachlan, Senior Director, Infrastructure Equity, Aviva Investors

Having recently launched a full fibre network along the Fylde Coast in Lancashire, ITS currently operates networks across areas including Bristol, East Midlands, Greater Manchester, North Wales, the North East and South East including London.

[1] Based on Ofcom’s definition of premises passed. Figure includes business and residential premises.v