Daisy targets £1bn mark as M&A set to continue

The comms VAR plans on more acquisitions in the comms and IT services space following Damovo move

Daisy Group has signalled its intention to become a £1bn-turnover company in the next half-decade as it continues its acquisition spree.

Matthew Riley (pictured below), the founder and executive chairman of the telecoms firm, told CRN: "We aim to be a £1bn turnover company in the next five years. To get there we will continue these acquisitions but also via our continued organic growth."

In June 2014, Daisy announced its sales were at £352.7m for the 12 months to 31 March, a fraction of a per cent up from the previous year.

Riley commented that the incoming Neil Muller, who is stepping into the role of chief executive in February, will help increase this growth.

"One of the things that Neil Muller brings in is that organic growth he instilled at Computacenter. If you look at their growth over the last three to four years, it has been in the high teens in every year, and we want to see that within our business," he said.

Daisy, which was privatised in January by investors Toscafund and Penta, along with Riley's own investment, completed its first acquisition of 2015 last week, acquiring comms VAR Damovo for an undisclosed amount.

Riley said that this acquisition will be the first of more to come this year.

"We see the Damovo acquisition to be the platform for growth and we are looking to do more acquisitions in this sort of space," he said. "The privatisation has meant we can become a little more fleet of foot than when we were on the public market when it comes to acquisitions and keep that entrepreneurial spirit which has been alive and well in Daisy since we founded the business."

Following the privatisation, analyst Megabuyte mused that a merger could be on the cards with companies part-owned by Daisy's new backers Toscafund and Penta Capital. The former owns a stake in services firm Phoenix IT, while the latter holds a slice of datacentre and hosting outfit Six Degrees.

When asked if there could be room for closer collaboration between Daisy, Phoenix and Six Degrees, Riley said: "I don't think so. They are separate businesses and I think the ownership has never been brought up internally so there are no plans at this moment in time."

Damovo move
Riley clarifed that Damovo will integrate within the Daisy Group; it will lose its name, but its offices will remain in place, under a new Daisy moniker.

When asked if there would be any job losses at Damovo, Riley said it is "too early to tell at this stage". He also commented that there have been no plans to change any senior Damovo management yet.

The buyout of Damovo in the UK coincided with the acquisition of Damovo Europe, by equity firm Oakley Capital Investments Limited, along with Riley himself.

Riley said: "The UK [Damovo] business was a different subsidiary to the European business, and it has absolutely nothing to do with the UK business so we are going to run them separately but we think there is a great opportunity in Europe to do something similar to what we have done in the UK with Daisy."

Riley said that the appointment of Muller, along with the Damovo acquisition, was indicative of Daisy's push into the IT space.

"Where we see the market going over the next five years is that convergence is speeding up at a rate of knots, so we think it's really important to have the IT services skills in your portfolio because that's what customers are going to be demanding, hence why Muller has come in and the way forward we see our business.

"If you only do one part of the solution you are going to be struggling in five years' time, you need to be able to offer the full solution to the customer."