James: Has buy-out king shown market naivety?


Fone Logistics founder Ian Gillespie, and business partner Michael Fitzpatrick, look to have done well from the sale of their airtime distribution business

By James Blackman (contact jamesb@mobilenewscwp.co.uk)

One has to question how you value an organisation such as Fone Logistics. An upfront fee, and one of £3.6 million especially, appears like a lot of very risky goodwill for a firm that has little tangible loyalty from either suppliers or customers.

Dealers are not tied into contracts, and network operators will cut distribution partners with 30 days’ notice as we have seen time and again in the past three years.

So how does Daisy see a return on that £3.6 million investment? Sure, revenue share has started to tie dealers into distributors to an extent.
But as we have seen in this market, operators will buy customers out of contracts and dealers out of commercial arrangements if the sense is there.

And Daisy boss Matthew Riley has a vast integration job on his hands across a multitude of new businesses.

There will inevitably be some fallout when the integration of Fone Logistics and Anglia happens.
You must wonder if Riley has shown some naivety with this purchase, only his second in the mobile market and his first which is not a sideshow in another strategic purchase.