TalkTalk to sell direct B2B unit to Daisy in £175m deal
UK-based broadband provider TalkTalk has agreed to offload its direct B2B business to Daisy in a deal worth around £175 million.
The two firms have signed heads of agreements on the deal, which will see TalkTalk keep its wholesale and indirect businesses, with Daisy taking over the direct business contracts of more than 80,000 corporate, SME and SoHo customers currently running services on TalkTalk’s network.
It comes amidst a year of restructures and appointments for TalkTalk, which saw revenue delined 4% year on year during the period ending 31 March, and operating profit more than halved to £91 million.
The direct B2B unit makes up less than 20% of TalkTalk’s overall revenue - £373 million in the latest financial year – according to the firm, with the deal set to close in late July.
TalkTalk’s chief executive, Tristia Harrison, said: “Last year we set out a strategy to radically simplify the business, focussing on fewer priorities that offer the best growth potential. TalkTalk has real strength in the Partner and Wholesale markets, where we have scale and a clear leadership position. It represents the vast majority of our revenue and profit and we see real opportunity to continue growing at pace.
“This proposed deal would allow us to focus on growth in those core B2B markets, whilst also removing significant complexity and cost from the business. As an existing strategic partner, Daisy is well placed to serve all direct customers, who would remain on our network and provide ongoing revenue.”
TalkTalk recently named chief operating officer Charles Bligh as the head of its new full fibre joint venture, which it launched in partnership with Infracapital, according to the Financial Times. Bligh is reportedly set to be joined by former BT Wholesale chief Paul Reynolds, who will serve as chairman of the £1.5 billion project.
Daisy Group itself has been linked to a potential £1.5 billion sale, though it refused to comment on rumours that founder Matthew Riley was looking at a possible listing.
The company, which started in 2001 and has carried out over fifty takeovers, went private in 2014, has been very acquisitive over the last few years since it was taken out of its public status in 2014 by the private equity companies Toscafund and Penta Capital, which paid $494 million in 2015.
A spokesperson for Daisy declined to comment any further on the story.