One of the UK’s most successful telecoms entrepreneurs has completed its latest transformation deal, buying rival XLN Telecom for £210m.
Sky News has learned that Daisy Group, founded and run by Matthew Riley, will announce its acquisition of XLN before the end of the week.
Adding XLN’s 120,000 small business customers to whom it provides business broadband, phones and card payment services, Daisy is second only to BT Group in the UK SME telecoms market.
Nelson-based Daisy Group said the deal for XLN, which provides more than 100,000 small businesses with essential services including business broadband, phones and card payments, would complete early next month.
Daisy said its mission of keeping Britain working is supplemented by the addition of XLN and extends its product portfolio to offer the widest choice of solutions to the business market.
A source close to the deal said it would create around 200 jobs and expand Daisy’s customer base in the small and medium-sized enterprise (SME) sector to over 200,000.
Chairman Matthew Riley said: “With so much investment across the UK to improve the fibre infrastructure, Daisy is now well-positioned to help unlock the enhanced speed, reliability and security that customers want in their offices and shops up and down the country. There is also a vast opportunity in the creation of jobs as we need more staff to help deliver that service.
“The analogue network switch off is fast approaching, meaning UK businesses are being pushed to explore digital services. Daisy are at the forefront in helping their customers understand the benefits and make the transition and will be employing more sales and service teams to continue this support.”
Dave McGinn, CEO of Daisy Communications, said: “I’ve always admired XLN and its philosophy of championing small businesses; it’s a great organisation and shares the same passion for customer service as demonstrated by their Trustpilot score. Daisy’s strategy has always been to acquire successful businesses and we’re delighted with the recent acquisition of XLN. We’re excited to work closely with the XLN team, to capitalise on our shared portfolio and to bring the best propositions and pricing to all of our customers. Ultimately, we want to keep enabling customers, collaboratively, to win in their marketplace.”
Christian Nellemann, founder and executive chairman of XLN, added: “We have been highly successful in our support of small businesses since our launch in 2002. We have continually innovated in both products and services which has enabled the company to continue to grow. Therefore, we felt the time was right to hand the reins over to Daisy, who have a great track record of investing and enhancing the businesses they acquire; the business and our customers are in safe hands.”
Mr. Riley has attempted to grow Daisy by positioning it at the heart of the transition to digital telecom services for access to greater speed, reliability and security.
XLN was founded in 2002 by Christian Nellemann to improve communication services for small independent businesses such as hairdressers and opticians.
Mr Nellemnann, who owned around 80 per cent of XLN with his father, is likely to net a cash windfall of almost £90m from the sale of the company, which owes around £100m in debt.
In 2019, Sky News reported that he had hired consultants to help advance a sale of the company, although it took almost three years to finalize a deal.
Daisy, whose founder has become one of the UK’s wealthiest self-made people, was briefly listed on the London Stock Exchange before being re-privatised in 2014 with the backing of Toscafund Asset Management.
Mr Riley built the company through a series of acquisitions including the £165m takeover of Alternative Networks.
After leaving school at the age of 16, Mr. Riley began his working life repairing fax machines before starting a recruitment business.
Lancashire-based Daisy manages mobile, cloud and other services for business customers and bills itself as the UK’s largest independent provider in the sector.
Last year, Mr Riley secured another coup by selling a minority stake in Daisy’s Digital Wholesale Solutions arm to private equity firm Inflexion, valued at £1billion.