Daisy Group has shortlisted a number of ‘large scale’ businesses for takeover, as it looks to continue the acquisition spree it set out from its flotation in 2009.
The firm has made 17 acquisitions since 2010 and is set to table an offer for its next takeover in the coming months. It comes after it amassed a £200m war chest from signing a deal with a group of six banks for a £50m, three year loan and a £150m revolving credit facility. The business is increasingly confident, with it set to pay its first ever dividend this summer.
Daisy CEO Matthew Riley said: ‘We have not finished with acquisitions - on the larger side though, rather than smaller. We have the banking facility and we are looking for someone with a bit of everything; someone with real size and scale and around £100m turnover. We have a shortlist.’
Daisy Group’s last acquisition was in February, when it took over IT data specialist The Net Crowd for an undisclosed sum. Previous purchases include former mobile industry giant Fone Logistics, as well as its competitor O-bit Telecom.
‘We have made 17 acquisitions in about three years, so there haven’t been many acquisitions for a while now,’ said Riley, adding that over the last year, the firm has been using the businesses it already bought to cross-sell. ‘We’ve been aligning ourselves,’ he said.
Around 20% of Daisy’s customers take mobile and Riley would like to see that figure rise to half of all clients in the next three years. ‘We’ve done so many acquisitions and we are all on the same platform,’ Riley said. ‘We are fully integrated now and it’s going to be a really exciting year for us. We’d like to see half our customers taking mobile in three years.’
The focus for Daisy Group is targeting its existing customers who have mobile deals with other providers, as they reach the end of their contracts. ‘It’s education-based; it’s a matter of telling people we’ve got mobile, you can have Vodafone or O2,’ said Riley. ‘A lot of people are on contracts, so we’ve been looking at when contracts are due. It’s sniper marketing rather than scattergun.’
Meanwhile, Daisy is planning a dealer event this summer, aimed at around 200 customers. Riley said: ‘This year we will be running a big project in enterprise with a big event in June, with 150 to 200 customers together as a workshop of chief technology officers and chief information officers.’
Daisy aims for 40% growth over the next 18 months
Daisy Group is aiming to increase its turnover by more than 40% to £500m by the end of 2014, the firm’s CEO Matthew Riley has said.
In November 2012, Daisy Group said it was ‘cautiously optimistic’ about the rest of its financial year, after pre-tax losses widened by 55.1% to £13.8m. The firm’s sales were flat at £178m but revenues were boosted by an increase in cross-selling, with 22% of the retail base taking three or more products. It is estimated that Daisy’s current turnover is £350m.
Daisy is also in the process of beefing up its staff and is looking for six people on the mobile sales team. The firm currently has 1,700 employees, up from 250 when it floated in 2009. ‘We can offer mobile as part of a managed service and we’re looking to recruit people, especially on the mobile side,’ Riley said.
Riley has always advocated the consolidation of ‘the fragmented reseller market’ and thinks the industry is likely to consolidate further. He added: ‘There will be a lot more consolidation in our marketplace. Everything’s looking good, it’s an exciting next few months. Watch this space.’