Virgin Media O2 and Daisy Group have gone and announced today that they’re planning to join forces in the UK business communications and IT sector. The new company, made up of most of Virgin Media O2 Business and Daisy Group, is expected to rake in about £1.4 billion in revenues. Virgin Media O2 will take the lead with a 30% ownership from Daisy Group. The deal is supposed to bring in more cash for everyone involved and help them grow bigger and better. The company will be run by Daisy Group’s founder, Matthew Riley, and Jo Bertram from Virgin Media O2 Business will be the CEO. They’re trying to put together a super experienced team that really knows what they’re doing in the industry. They’re planning to mix the best people from both sides to make things work smoothly.
At first, both teams will stick to their separate brands and keep working from their current offices. This new company is going to focus on helping tons of UK businesses with their communication and IT needs, from small offices to big ones, even public sector organizations. They’re counting on having more power, skills, and attention to detail, all while boosting their digital game. Virgin Media O2’s fancy fiber and mobile infrastructure will be combined with Daisy’s IT and sales management tools, plus their award-winning customer service. The plan is to offer top-notch digital connectivity solutions and managed services all in one place. This includes cloud tools, 5G Private Networks, IoT connections, security fixes, and AI-powered products. They’re trying to cater to both new and old customers with a mix of goodies.
The new company is getting support from Virgin Media O2’s network deals, plus agreements with Telefónica and Liberty Global. They’re hoping to make the most of high-growth products and services from all these groups. Virgin Media O2’s fixed and mobile wholesale stuff, like smart meters and connections to MVNO customers, will stay under Virgin Media O2’s control. Lutz Schüler, the big boss at Virgin Media O2, said, “This mash-up of Virgin Media O2 Business and Daisy Group is the perfect combo to shake things up in the market. We’re trying to push B2B growth and give UK businesses the best digital and connectivity stuff out there.” Matthew Riley from Daisy Group added, “This is a game-changer for us. We’re aiming to shake things up and offer the best options for all kinds of businesses in the UK.”
When it comes to the nitty-gritty details, this new entity is looking at roughly £1.4 billion in revenues for 2024, an EBITDA of £150 million, and an EBITDA less Capex of £100 million. They’re planning to save about £600 million through synergies, with a good chunk of that coming in the first three years. They’re hoping that by being smart with their money and beefing up their skills in key areas, they can make more money in the years ahead. The deal is set up with an intercompany loan from Virgin Media O2 and some debt from Daisy Group. Virgin Media O2 is going to get some cash at the same rate as their debt to pay off Daisy’s loans. Virgin Media O2 will be in charge of everything, but it shouldn’t mess up their debt too much. They’re planning to pay off some bills first before spreading the wealth around.
Daisy Group, started by Matthew Riley in 2001, has grown to be one of the UK’s top communication businesses, offering all kinds of tech solutions. They’ve been making moves for the last 24 years, growing their business bit by bit. The deal is set to close in the second half of 2025 if everything goes smoothly. More news about who’s running the show will come out soon.
In the world of advisors, Jefferies and Deloitte are helping out Virgin Media O2, while Houlihan Lokey and EY are on Daisy Group’s side. They’ve got a whole team of lawyers making sure everything is legal and above board. So, looks like this merger is going full steam ahead, and we’ll have to wait and see how things turn out.
