InternetFinance & Technology, 14thApril 2001
HighSpeed Office (HSO), the ARC Associates and Marconi backed broadband service provider, has secured a £15m private equity placement following negotiations first reported in Internet & Technology Finance back in February 2001. The investment included a £5m investment by Marconi Plc with the remaining £10m coming from a consortium of UK landlords, comprising British Land, Canary Wharf, Legal and General, Morley Fund Management and Prudential. The consortium was advised by Morgan Stanley and has selected HighSpeed Office as its preferred broadband service provider as part of the deal. ARC Associates, which is also a seed financier, advised HSO.
HSO CEO Chris Butchers expressed his delight that the majority shareholders in the business were now customers and suppliers and highlighted the benefits of having partners rather than third party financiers as shareholders. He added that the £15m would be enough to take the company through to profitability in three years. HSO will launch its broadband services in June 2001, followed by a rapid roll out across the UK. The company is exclusively focused on the UK market and Butchers only foresees future expansion overseas as propelling a return to the financing markets.
Over 15 property developers are also currently in discussions to join the company as partners although no further finance will be sought. HSO is looking to secure up to 2000 SME customers within the next year and intends to build a client base of 5000 by 2003. While no revenue projections were given, it is thought that the average SME would spend £70-90 per desk per month. SMEs generally average in size from 20-200 desks. (www.highspeedoffice.net)
Reproduced from InternetFinance & Technology
http://www.telecomfinance.com