Daisy to shift acquisition focus
VAR vows to continue shopping spree but will turn to skills-focused deals in 2011
Telecoms buy-and-build player Daisy Group is moving away from volume-based acquisitions as it looks for opportunities to build a platform for organic growth.
In the past month, the Lancashire-based firm has laid out a total of more than £50m on Spiritel and Network Europe Group (NEG) in its largest deals to date.
Daisy’s systems business – which accounted for nine per cent of its first-half revenue – will be given a shot in the arm by the two deals.
Spiritel and NEG bring with them strong manufacturer relationships with Mitel and Avaya, respectively.
Daisy chief executive Matthew Riley (pictured) told CRN the firm’s shopping spree will continue for at least the next year, but that value would be the watchword in 2011.
Acquisitions in the data, mobile, systems and network services markets are of interest, he added.
“We are trying to make sure we have a business that can grow organically,” he said.
“Some acquisitions we made last year were opportunistic; now it is more about strategic acquisitions, so that we can grow the underlying business.”
Riley said there has been an increase in private equity interest in the telecoms space, but that Daisy has “absolutely no plans” to return to private ownership.
He added that Daisy’s acquisitive pedigree means it can be more aggressive on price.
“Because we have a proven track record on delivery, [we have won deals] where we were not the preferred bidder on price,” he explained.
Daisy’s original objective was to consolidate the SMB telecoms space, but Riley insisted that the firm is becoming a force in the upper echelons of the market.
Its three datacentres are key differentiators, he added. “We are definitely in the mid-market; the Spiritel acquisition was all about strengthening that,” he said.
Justin Coombes, marketing manager at rival Gamma Telecom, claimed Daisy was prudent to switch its focus from volume to value.
“It will slow down. There is only so much you can do in terms of integration,” he added. “That is [Daisy’s] big challenge now.”