Virgin Media O2 and Daisy Group are merging their 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 will be consolidated by Virgin Media O2, with Daisy Group holding a 30% stake.
The new company will be led and chaired by Daisy Group founder Matthew Riley, and Jo Bertram, managing director of Virgin Media O2 Business, as CEO.
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 latest Daisy deal follows a merger in 2024 with Wavenet, a company mainly owned by Australian investment giant Macquarie, which separated Daisy Corporate Services from the group and integrated it into Wavenet.
The latest new company will serve the communications and IT needs of “hundreds of thousands” of UK businesses, we are told, including small offices, SMEs, large enterprises and public sector organisations, as well as indirect partners.
It will benefit from Virgin Media O2’s fibre and mobile infrastructure, combined with Daisy’s end-to-end IT and sales management platforms, offering 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.
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.
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.”
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.”
Based on full year 2024 performance, the entity will have approximate pro forma revenues of £1.4 billion, adjusted EBITDA of £150m and adjusted EBITDA less Capex of £100m, and is expected to deliver around £600m of operational synergies on a net present value basis, including integration costs, primarily attributable to cost savings.
The transaction is expected to close in early H2 2025, subject to regulatory approval.
