The acquisition has accelerated its nationwide full fibre rollout by up to 300,000 premises as part of its overall 8 million rollout programme.
The share-based acquisition will result in Newlight Partners becoming minority shareholders in CityFibre and is expected to be completed in Q2 2024.
Lit is a vertically-integrated altnet, comprising a network builder and ISP. It has a current footprint of more than 200,000 premises across more than 20 towns in Wiltshire, Gloucestershire, Hertfordshire, Worcestershire, Essex and Suffolk, and serves a 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 its 8 million premises target.
CityFibre will begin to 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 products, pricing and service experience across the extended footprint.
Lit has a significant and complementary network footprint which has been deployed 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.
CityFibre intends to complete Lit's work-in-progress deployment as well as the majority of its planned network rollouts. Lit is on track to deliver up to 100,000 further premises by early 2025.
CityFibre will prioritise Lit's swift network integration. The full fibre broadband services provided 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 made a number of acquisitions, including KCOM and Redcentric's national network assets, as well as Entanet and FibreNation. This provides CityFibre with the experience required to 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."