Daisy £175m deal for TalkTalk's direct B2B unit breaks down

Daisy £175m deal for TalkTalk's direct B2B unit breaks down

A £175 million deal that would have seen UK-based telecoms firm TalkTalk offload its direct B2B unit to wholesaler and reseller Daisy has collapsed, according to a stock exchange filing.

TalkTalk announced its plan to offload its B2B business, to Daisy in May. The deal would have seen 80,000 direct enterprise customers transfer to Daisy, who already operates as a reseller of TalkTalk connectivity.

According to a filing issued to the London Stock Exchange, TalkTalk will now continue to manage its own B2B business.

Reports claim the deal has now been scrapped after failing to agree terms for the unit, which comprises of around 20% of TalkTalk’s overall B2B revenue. This came despite Daisy conducting due diligence on the acquisition since May.

Daisy has a record of making acquisitions, having bought EE direct partner Voice Mobile at the end of June. 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.

It has itself been linked to a potential £1.5 billion sale, though it refused to comment on rumours that Daisy founder Matthew Riley was looking at a possible listing.

Riley recently took control of the day-to-day running of the business after CEO Neil Muller quit. Muller had been with Daisy for more than three and a half years, but the company announce his departure at the end of last month. It is unclear if Muller’s departure and the collapse of the TalkTalk deal are connected.

In a statement to the LSE, TalkTalk said: "TalkTalk and The Daisy Group have jointly agreed not to proceed with the proposed sale of TalkTalk's direct B2B business, as announced on 24 May 2018.

"TalkTalk will continue to manage all direct B2B business, providing uninterrupted services for customers. FY19 EBITDA guidance remains at the originally stated 15% year-on-year growth (FY18 £233m). Daisy remains an important, long-term strategic partner for TalkTalk."