Virgin Media O2 has unveiled plans to form a new communications and IT behemoth, which is anticipated to have a turnover of approximately £1.4bn.
The development involves the merging of Virgin Media O2 and Daisy Group's direct B2B operations, as reported by .
The newly forged entity will see Virgin Media O2 holding a majority stake of 70 per cent, while the Daisy Group, headquartered in Lancashire, will retain the remaining 30 per cent.
Daisy Group's founder Matthew Riley is set to lead and chair the new venture, and Jo Bertram, currently managing director at Virgin Media O2 Business, will take on the role of chief executive.
According to Virgin Media O2's statement, the business aims to cater to the varied communication and IT needs of hundreds of thousands of º£½ÇÊÓƵ enterprises – from small offices and SMEs to large corporations and public sector entities, alongside indirect partners.
The company also made clear that its fixed and mobile wholesale operations, which cover areas such as smart metering and services to mobile virtual network operators, will continue to be wholly owned within Virgin Media O2.
Virgin Media O2 hails 'perfect pairing'
Lutz Schüler, CEO of Virgin Media O2, hailed the merger saying, "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."
He further emphasised the significance of the move: "For us, it's a big step forward in our journey to boost B2B growth and provide º£½ÇÊÓƵ 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."
The newly merged entity is anticipated to boast pro forma revenues of around £1.4bn and an adjusted EBITDA of £15m, drawing from financial figures for 2024.
The structure of the transaction will involve Virgin Media O2 contributing an approximately £425m secured intercompany loan, while Daisy Group will take on approximately £835m of debt.
The culmination of this agreement is set for the latter half of 2025.
Deal will 'revolutionise landscape'
Matthew Riley, founder and chairman of Daisy Group, expressed his enthusiasm: "This is a significant milestone in Daisy's 24-year history."
He further highlighted the transformative nature of the deal: "This transformational transaction will revolutionise the telecommunications and IT landscape and create the most comprehensive offering for businesses of all sizes across the º£½ÇÊÓƵ."
Riley linked the merger's significance to national growth objectives: "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 º£½ÇÊÓƵ 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."
Virgin Media O2 and its stockholders engaged Jefferies for financial advising, while Deloitte aided with financial due diligence and tax matters.
A range of legal counsel was facilitated by A&O Shearman, Simmons & Simmons and Ropes & Gray in relation to the financing aspects.
On the side of Daisy and its shareholders, Houlihan Lokey and EY served as financial advisers; PwC offered tax advice, and Paul Weiss, Clifford Chance and DWF provided legal advice.
