Infrastructure companies in talks to acquire UK alternative network Trooli.

Forecasts about consolidation amidst fibre broadband competitors due to the increase in interest rates and expenditures.

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Two companies that specialize in infrastructure are close to finalizing a purchase agreement for a UK-based company that provides full fibre broadband services. The acquisition is expected to be worth over £100mn, and is part of a larger trend of consolidation as the industry faces financial difficulties due to increased interest rates and expenses. Many experts anticipate that there will be a significant increase in similar acquisitions in the near future.

Vauban Infrastructure Partners and Axione, which is backed by Vauban and based in Paris, are reportedly in talks to purchase Trooli, a company operating in the rapidly growing market of alternative networks. Three individuals with knowledge of the discussions revealed this information.

Virgin Media O2, which is owned by Telefónica of Spain and Liberty Global, had also contemplated acquiring the company. Nonetheless, they withdrew their interest earlier this month due to the high price tag and the projected expenses of repairing the network, according to individuals familiar with the company's perspective.

Industry leaders believe that the possible sale of Trooli is indicating the stress in the alternative network industry. This industry is facing the challenge of increasing expenses and high interest rates, which are making it more difficult to obtain private funding.

The CEO of a major alternative network provider in the UK stated that currently no financing is being obtained. The equity has disappeared for all businesses.

A person with insider knowledge said that the industry is just getting started with a series of mergers and acquisitions, likening it to a snow avalanche that is about to happen.

Over one hundred alternative network providers (altnets) have emerged throughout the country, receiving billions in private funding, in pursuit of building their fiber networks before either Virgin Media O2 or BT's Openreach division reach their target areas. This phenomenon has been dubbed the "fibre gold rush".

Numerous companies have successfully installed fibre that can be utilized by thousands of households. However, they have encountered difficulties in convincing consumers to switch to their networks. According to analysts, businesses must acquire a minimum of 30% of customers in a specific area to ensure profitability.

Openreach has been working hard to compete with alternative network providers and meet its targets as required by the government. They are looking to modify their rates for wholesale customers who do not have their own fibre networks - this is the second time they have made such a change in two years. However, this decision has provoked anger from executives of alternative network providers and their private equity investors.

Trooli has recently secured a total of £67.5 million in debt from a group of lenders this year. An official report produced by Lazard, the investment bank handling the selling process, revealed that Trooli has successfully connected more than 200,000 homes, predominantly in southeastern England at an average cost of only £170 per home. The report also discloses aspirations of expanding its network to reach 2.1 million households by 2026. Moreover, it emphasizes the company's commitment to avoiding VMO2's territory, hence constructing a network that complements other players in the industry.

Trooli, Vauban Infrastructure Partners, and Axione did not provide any response when asked for their comments. Lazard chose not to comment.

A previous edition of this piece inaccurately indicated that Axium Infrastructure, located in Montreal, was in talks to purchase Trooli.