CityFibre has agreed a £538m takeover by a Goldman Sachs-backed consortium.

The firm said this will be easier to fund its plan to build full-fiber networks serving 20% of the UK market under private ownership.

CityFibre is building its own fiber-optic broadband network, taking on BT in selected towns and cities, including Glasgow, Edinburgh, and Aberdeen.

It signed a partnership last year with Vodafone that will see the mobile company market its ultra fast broadband networks in around 12 British towns and cities, starting with Aberdeen, Milton Keynes, and Peterborough.

Infrastructure funds are targeting opportunities to invest in Britain’s communications networks, which the government wants to upgrade to “gold standard” fiber connections.

M&G Prudential tied up with broadband provider TalkTalk in February to build a network connecting three million homes and businesses.

CityFibre’s chief executive Greg Mesch said the company had raised £325m itself, but was now looking for long-term capital. “We think it’s a perfect time to shift from public ownership and public scrutiny to private long-term patient capital while we go through this mass period of construction,” he said.

Its ambitions extend to five million premises, which based on average build costs of £500 per premises, would require investment of up to £2.5bn.

CityFibre also said that its turnover more than doubled last year to £34.8m, helped by the acquisition of wholesale fiber company Entanet.

Aberdeen is set to become a forerunner for digital transformation in Scotland with the announcement of a new Gigabit-capable full fibre broadband network under the Vodafone and CityFibre Fibre-to-the-Premises (FTTP) programme.

The Vodafone and CityFibre partnership will mean that Aberdeen becomes Scotland’s first city in which nearly every home and business will have access to gigabit-speed broadband.

It will also help the Scottish Government achieve its ’Reaching 100%’ ambition of making Scotland one of the best connected places in Europe, unlocking its full potential in a digital world. CityFibre will invest at least £40 million of private funds in the city-wide roll-out.