nexfibre, Virgin Media O2 acquire altnet Upp
September 6, 2023
UK fibre builder, nexfibre, in partnership with Virgin Media O2, has reached an agreement with fibre operator, Upp, to acquire the provider. The acquisition will boost the fibre footprint of nexfibre by 175,000 premises in the East of England and ensure investment and network build in the region continues.
The all-cash deal sees Virgin Media O2 initially purchase the provider and carry out integration work, but nexfibre will ultimately fund the acquisition through a back-to-back agreement to buy Upp’s network assets.
As a result of the transaction, nexfibre will gain a regional fibre network with low overlap of the existing Virgin Media O2 footprint and a build engine that will continue expansion in the region. Through its access to the nexfibre network, Virgin Media O2 will extend the reach of its gigabit connectivity to more homes.
Over the next 12 months Virgin Media O2 will proceed with completing Upp’s build currently in progress; integrating and aligning Upp’s fibre network and systems; and offering Upp customers a wide range of Virgin Media O2 services.
nexfibre will then acquire the network assets with this second stage transaction expected to complete within the next year and resulting in a de minimis net cash outflow for Virgin Media O2. The full range of Virgin Media O2’s broadband services are available via the nexfibre network.
As part of a longer-term rollout plan which is already in place, nexfibre, with Virgin Media O2 acting as a build supplier, will continue to expand its network in the East of England with an expected investment upwards of £350 million to reach more than 500,000 premises by 2026.
Upp’s ~4,000 existing retail and business customers will be offered a range of Virgin Media O2 services in the coming months, with no service changes occurring in the near term as a result of the transaction. Clear communications providing further details will be sent directly to Upp customers.
Upp, formerly known as FibreMe, was founded in 2021 by a group of British entrepreneurs with extensive telecoms experience. Since then, the company has invested and delivered reliable full fibre connectivity to homes and businesses in the East of England and East Midlands. This includes areas such as Boston, Lincoln, Norwich and King’s Lynn.
nexfibre is a network joint venture owned by Liberty Global, Telefónica and InfraVia Capital Partners and is investing £4.5 billion to bring fibre to 5 million homes by 2026 with the option of reaching a total of 7 million homes beyond that.
Andrea Salvato, Chairman of nexfibre, said: “Our acquisition of Upp’s network assets represents an important step as we continue to build a world class fibre network along with our wholesale partner Virgin Media O2. At nexfibre, we are on a mission to build and expand our network in suburban and semi-rural areas, closing the digital divide and boosting local economies. Upp is a high-quality regional fibre network in the East of England and will accelerate our rollout in an area where we expect to invest more than £350 million by 2026.”
Lutz Schüler, CEO of Virgin Media O2, commented: “Virgin Media O2 is playing a key role in supporting nexfibre with integration work and build, and through our wholesale partnership we will extend the reach of our gigabit connectivity in the East of England. Building on the strong foundations that exist today, Virgin Media O2 and nexfibre have a clear strategy in place to be the biggest fibre challenger in the country, offering greater choice and competition to the BT status quo.”
Drew Ritchie, CEO of Upp, added: “Upp is delighted to have been acquired by nexfibre, in partnership with Virgin Media O2, and we are looking forward to continuing the rollout of full fibre in the East of England. It is an important recognition of the scale and quality of the network that we have built, and all the hard work and effort put in over the last two years. Since we began in early 2021, Upp has grown to deliver the quality, scale and excellence in customer service envisaged from the start. We are all personally very proud of having this recognised by our thousands of customers and through the purchase by industry leaders. We would like to extend our thanks to our previous shareholder for the belief and backing they gave us from the start and we’re now looking forward to working with the nexfibre and Virgin Media O2 teams to make the most of the opportunities ahead.”