Niu Solutions clips M&A wings
VAR will focus on organic growth following sale of 3,000 clients to Daisy
VAR Niu Solutions has scaled back its buy-and-build ambitions after offloading half of its business to rival Daisy Group for up to £15.4m.
The Investec-backed outfit acquired four firms in 2008 and laid out plans to double sales to £100m through further M&A last year.
Last week, the company agreed to sell off about 3,000 voice, data and onsite PBX clients associated with its Telinet and Ipitomi businesses, which represent about half of its £50m turnover. Some 70 staff will move across to Daisy under TUPE regulations.
Gary Woodward, chief executive of Niu Solutions, admitted the economic backdrop had forced Niu to pare back its M&A ambitions and said the proceeds would be used to pay off debt.
"We have been on a buy-and-build mission for the past two to three years," he said. "It has not gone as well as we anticipated. When we embarked on it, the economy was a brighter place."
The disposal leaves Niu with 300 clients in the outsourcing and managed services space, which will now be the firm's focus.
"Daisy approached us last year and we took the decision that it was a good price and enables us to focus on the high-value part of the business," said Woodward.
"We have a clear strategy to grow the business organically in what we do best. Before the end of the year, we will embark on a targeted acquisition strategy."
Daisy said that the deal, its second inside a week, will boost its clout in the mid-market and hand it extra Avaya and Mitel engineering capabilities. The payment will comprise £12.4m cash on completion of the deal with a further £3m deferred for up to two years.
Daisy chief executive Matthew Riley said: "This deal will further strengthen Daisy's position as a leading provider of unified communications to the mid-market."