Virgin Media O2 and Daisy Group have announced plans to merge their complementary direct B2B operations to create a major new force in the UK business communications and IT sector.
With annual pro forma revenues of around £1.4 billion, the new entity, formed of substantially all of Virgin Media O2 Business and Daisy Group, will be consolidated by Virgin Media O2 with Daisy Group holding a 30% stake.
The deal is value-accretive for all parties and is projected to drive further growth through greater scale, efficiencies and a combined set of products.
The company will be led and chaired by Lancashire-based Daisy Group’s founder, Matthew Riley, and Jo Bertram, managing director of Virgin Media O2 Business, as CEO, creating a leadership team with a deep understanding of the sector. The management team will combine the best talent from both organisations. At the outset, both businesses will operate under their separate brands from their current office bases.
The new company will serve the communications and IT needs of hundreds of thousands of UK businesses – small offices, SMEs, large enterprises and public sector organisations, as well as indirect partners. It will have greater scale, expertise and focus, while boosting digital capabilities, benefitting from Virgin Media O2’s next generation fibre and mobile infrastructure, combined with Daisy’s end-to-end IT and sales management platforms and award-winning customer service.
The new entity will offer significant economies of scale and a range of best-in-class digital-first connectivity solutions and managed services all under one roof. This will include cloud-based communications tools, 5G Private Networks, IoT connectivity, security solutions and AI-powered products, such as O2 Motion, catering to a broad mix of new and existing customers.
The company will be supported by fixed and mobile connectivity wholesale agreements with Virgin Media O2, and supplier arrangements with Telefónica and Liberty Global to leverage high-growth products and services from across the portfolio of those wider shareholder groups.
The company will be supported by fixed and mobile connectivity wholesale agreements with Virgin Media O2, and supplier arrangements with Telefónica and Liberty Global to leverage high-growth products and services from across the portfolio of those wider shareholder groups.
Virgin Media O2’s fixed and mobile wholesale operations, which include smart metering and connectivity to MVNO customers, will remain fully owned within Virgin Media O2.
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Lutz Schüler, CEO of Virgin Media O2, 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. For us, it’s a big step forward in our journey to boost B2B growth and provide UK businesses of all sizes with the best digital and connectivity offerings. 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.”
Daisy Group Founder and chairman, Matthew Riley, added: “This is a significant milestone in Daisy’s 24-year history. 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. 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.”
