- Creation of a new B2B company, combining Virgin Media O2 Business and Daisy Group, with an ownership split of 70% Virgin Media O2 and 30% Daisy Group
- Combination will benefit from significant scale, offering UK businesses a comprehensive range of best-in-class digital-first connectivity solutions and managed services all under one roof, underpinned by Virgin Media O2’s next generation fixed and mobile infrastructure and Daisy Group’s digital-first operations and modern IT systems
- New entity will be led by Daisy Group founder, Matthew Riley, as Chairman and Jo Bertram as CEO
- Deal will be value-accretive for both parties
- Transaction expected to close in early H2 2025 subject to customary regulatory approvals
12 May 2025: Virgin Media O2 and Daisy Group have today 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 Daisy Group founder, Matthew Riley, and Jo Bertram, Managing Director of Virgin Media O2 Business, as CEO, creating a highly experienced 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 dedicated 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.
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. 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, commented:
“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.”
Transaction details and financial profile
Based on full year 2024 performance, the entity will have approximate pro forma revenues of £1.4 billion, Adjusted EBITDA of £150 million and Adjusted EBITDA less Capex of £100 million, and is expected to deliver around £600 million of operational synergies on a net present value basis, including integration costs, primarily attributable to cost savings. This equates to a pre-tax annual run-rate of ~£70 million by 2030.
Through leveraging Virgin Media O2’s own networks, reducing duplicated costs, pursuing cross and up sell opportunities and integrating IT systems to create a more efficient, productive and agile company, these synergy benefits are projected to materialise quickly, with more than half of synergies anticipated to be realised within three years of closing.
With these operational synergies and increased capabilities in key sectors helping to ensure the company is better suited to serve fast changing customer demands, it is projected to grow profitability in the years post-completion.
The transaction will be structured through the contribution of an approximately £425 million secured intercompany loan by Virgin Media O2 and approximately £835 million of debt by Daisy Group. Virgin Media O2 is set to raise additional financing at its cost of debt at closing, enabling the repayment of existing Daisy facilities through a second secured intercompany loan. The entity will be fully consolidated by Virgin Media O2, with the transaction set to have a minimal short-term impact on Virgin Media O2’s overall leverage, and the company’s 4x – 5x medium term leverage range target will remain unchanged. Cash flow distribution to shareholders will follow an alike policy to Virgin Media O2, with an initial focus on deleveraging. Conventional exit provisions have also been agreed, providing strong future optionality.
Founded by Matthew Riley in 2001, Daisy Group is one of the UK’s largest independent, specialist communications businesses delivering a range of cloud, communications and IT solutions to companies across the country. Having expanded the business organically and through a series of acquisitions over the past two decades, Daisy Group is one of the country’s most successful growth stories.
The transaction is expected to close in early H2 2025, subject to customary regulatory approvals, with further director and management announcements occurring in due course.
Transaction Advisers
In connection with the transaction, advisers for Virgin Media O2 and its shareholders include Jefferies as financial adviser and Deloitte supporting on financial due diligence and tax. Legal advisers include A&O Shearman, Simmons & Simmons and Ropes & Gray providing legal advice in relation to the financing.
For Daisy and its shareholders, Houlihan Lokey and EY are acting as financial advisers, PwC acting as tax advisers, and Paul Weiss, Clifford Chance and DWF as legal advisers.
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Media Contacts:
Media enquiries for Daisy Group
SEC Newgate e: daisygroup@secnewgate.co.uk
Emma Kane/Robin Tozer t: 07876 338339 / 07540 106366
Media enquiries for Virgin Media O2
e: press@virginmediao2.co.uk
t: 01753 565656
James Lusher t: 07870 380174
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