Channel sees flurry of acquisition activity

Daisy chain: the acquisitive telecoms firm bought two firms last week and is rumoured to be close to a third deal

Channel consolidation continues apace after a blockbuster week which saw a number of hefty deals tied up.

Acquisitive telecoms provider Daisy snapped up resale and services group AT Communications (ATC) and VAR Eurotel. ATC had previously fallen into administration and was bought for £7m in cash, while Eurotel cost £13.5m.

On the same day, online VAR WStore was acquired for an undisclosed sum by US behemoth Systemax, which also owns Misco.

Daisy’s director of mergers and acquisitions Steve Smith said his company’s intention was to become a “natural alternative to BT” among SMEs and mid-market firms.

Daisy recently floated on the alternative investment market and Smith claimed it would continue to acquire.

“Flotation allowed us to raise funds for opportunities like this and having cash in the bank allowed us to be fleet of foot,” he said.

Smith said all staff from the two firms will migrate. Both companies will join the Daisy Group, rather than continue as autonomous subsidiaries.

“Integration is the number one priority,” he added.

Richard Bligh, group marketing director for Gamma Telecom, agreed that integration should be Daisy’s primary focus.

“The fundamental reason that ATC was sold was its failure to integrate acquisitions,” he said. “It is a challenge, but who is to say Daisy is not up to it?”

Channel speculation has suggested that Daisy is set to complete a third deal. Industry players said part of the Redstone group was a possible target. Neither firm was available to comment.