Virgin Media O2 (VMO2) has announced a merger of its business to business (B2B) operations with the complementary assets of Daisy Group.
Founded by Matthew Riley in 2001, Daisy Group describes itself as an independent, specialist communications businesses delivering a range of cloud, communications and IT services to companies across the UK. The business has expanded organically and through a series of acquisitions over the past two decades.
The deal will be structured through the contribution of an approximately £425m secured intercompany loan by VMO2 and approximately £835m of debt by Daisy Group. The new entity is calculated to have annual pro forma revenues of around £1.4bn, and will be consolidated by VMO2 with a 70% holding, with Daisy Group making up the remaining 30%.
The company will be supported by fixed and mobile connectivity wholesale agreements with VMO2, and supplier arrangements with Telefónica and Liberty Global to offer high-growth products and services from across the portfolio of those wider shareholder groups.
The dedicated new company will look to serve the communications and IT needs of hundreds of thousands of UK businesses from small offices, small and medium-sized enterprises (SMEs), large enterprises, and public sector organisations, as well as indirect partners. VMO2 and Daisy Group are confident the company will have greater scale, expertise and focus as a combined entity, benefitting from VMO2’s fibre and mobile infrastructure, combined with Daisy’s end-to-end IT and sales management platforms and customer service.
Digital-first connectivity offerings and managed services for new and existing customers will include cloud-based communications tools, 5G private networks, internet of things connectivity, security services and artificial intelligence-powered products such as O2 Motion. VMO2’s fixed and mobile wholesale operations, which include smart metering and connectivity to mobile virtual network operator customers, will remain fully owned at VMO2.
The firm will be led and chaired by Daisy founder Riley, and Jo Bertram, managing director of Virgin Media O2 Business, as CEO. At the outset, both businesses will operate under their separate brands from their current office bases.
Virgin Media O2 CEO Lutz Schüler said: “Combining Virgin Media O2 Business with Daisy Group is the perfect pairing, and creates a new British business connectivity powerhouse and greater competition in the market. Following completion, the new company will have the scale, talent, focus and infrastructure needed to drive digital transformation and provide business customers with an innovative one-stop shop for all their communications and IT needs. We can’t wait to get started on this next chapter in partnership with Daisy.”
Riley added: “This transformational transaction will revolutionise the telecommunications and IT landscape and create the most comprehensive offering for businesses of all sizes across the UK.
“Growth is top of the political and business agenda – inextricably linked to this is access to world-class IT and communications infrastructure that is integrated and can scale,” he said.
“Our new entity, which brings together two highly successful companies, will deliver a comprehensive solution for the fast-changing needs of UK organisations supported by specialist teams that have a relentless focus on customer service. It will be driven by the entrepreneurial spirit for which we are known and will catalyse the next phase of our ambitious growth plans.”
