Growing the Daisy chain

Matthew Riley is in buoyant mood and it is little wonder. Daisy, the telecoms group he founded in east Lancashire almost a quarter of a century ago, has just sealed a headline-making merger deal
with Virgin Media O2.

The move will see the two organisations combine their direct business-to-business operations into a giant new entity with an anticipated turnover of around £1.4bn.

The result has been described as creating a British business connectivity powerhouse.

A tired but happy Matthew, speaking to Lancashire Business View just hours after it was announced, also describes the deal in expansive terms. “The partnership is massive,” he declares and adds: “It just takes us to another level.”

Nelson headquartered Daisy will hold a 30 per cent stake in the new entity.

It will be led and chaired by Matthew, while Virgin Media O2 Business’ managing director Jo Bertram will serve as its chief executive.

According to reports, it will be second behind only BT in the UK telecommunications market in terms of size.

At the outset, both businesses will operate under their separate brands from their current office bases.

The transaction is expected to be completed later this year, subject to customary regulatory approvals.

Matthew, a former YTS trainee fax machine engineer at FH Brown in Burnley, set up Daisy in 2001 working out of his garage.

Today the group employs 1,400 people across nine UK sites. It is one of the UK’s largest independent, specialist communications groups, delivering a range of cloud, communications and IT solutions to companies across the country.

Having expanded the business organically and through a raft of acquisitions over the past two decades, Daisy Group has been described as one of the country’s most successful growth stories.

Disruption is in Matthew and Daisy’s DNA.

In 2010 he told Lancashire Business View that the launch plan was to be the alternative to BT for SMEs in the UK.

He said at the time: “From my perspective I could see that BT was a giant oil tanker of a company that could not change to meet the needs of customers as quickly as we could.”

Today, Matthew, who was named national ‘Young Entrepreneur of the Year’ in 2007 and appeared as a judge on BBC TV’s The Apprentice in 2011, remains in disruption mode.

He predicts that the merger “will revolutionise the telecommunications and IT landscape” and create the most comprehensive offering for businesses of all sizes across the UK.

And he adds: “It will be driven by the entrepreneurial spirit for which we are known and will catalyse the next phase of our ambitious growth plans.”

The offering is simple and was spelled out in the statement announcing the deal, which said: “The new entity will offer significant economies
of scale and a range of best-in-class digital-first connectivity solutions and managed services all under one roof.”

Matthew says that the deal took just six months to complete. He says: “I’ve known Virgin Media O2 Business for a lot of years and for the last five or so I’d been asking if they’d sell the business.

“The answer was always ‘no’. It was the same just before Christmas but they also said ‘let’s have a chat’. We did and, as a result, we’ve ended up with this deal.

“Virgin Media O2 Business doesn’t have its own identity and is engulfed by a huge consumer business and doesn’t get the attention it merits.

What we have now is great opportunity for all the people who work within it and their customers.”

He describes the cross-selling opportunities that the merger will deliver as “enormous.”

He points out that the Virgin Media 02 Business has more than 500,000 customers.

As well as spelling out the potential, Matthew is also clear on Daisy’s future. It will remain based in Nelson.

The 51-year-old says: “It is a Lancashire success story. I was talking to one of our suppliers today and they asked, ‘Are you going to move head office?’ I said, ‘Not a chance!’

“We have brilliant employees here and they are such a loyal workforce. That is why we have been so successful over the years. We’ve got families employed here, it is a friendly place to work and a friendly customer service experience that we are delivering.”

He adds: “I’m a really proud Lancastrian. I love living and working in Lancashire. People should be proud about where they are from and not lose their roots.”

Matthew left St John Fisher and St Thomas More RC school in Colne with no qualifications.

According to this year’s Sunday Times Rich List, the former Lancashire Business View ‘Young’Uns’ winner has an estimated worth of £500m. It has been some journey.

He says: “A lot of people say I can’t sit still and I’ve got ‘ants in my pants’ syndrome. I’m always looking to do things. I’ve always had the ambition to grow the business and keep developing.

“But if you’d told me in 2014 that I’d be doing this deal I’d have had to pinch myself.

“In 2005 we were named the fastest growing tech company in the UK. Time really flies, it only feels like a few days ago.”

Matthew and Daisy’s record of growth was impressive, even before this latest deal. At one stage the business was floated on the AIM stock market before he led a consortium to delist it, going on to take full control in 2018.

Looking back, he counts some 70 acquisitions that the group has made on its growth journey since its creation.

When it comes to dealmaking Matthew says: “You have got to be really disciplined.

“The reasoning behind our acquisitions has been to do the deal because it brings us a new product or because it adds more customers that we can sell more products to.

“We’ve also not gone too far off the beaten track. We’ve kept to what we are good at, communications and IT services and B2B.”

Looking ahead there may be more deals ahead. He says: “The first thing is to bed in the merger and get their customers to move to our
platforms. That is important. But don’t rule us out from doing further consolidation.”