Daisy Group buys NEG MBO Two for £23.5m

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Acquisition sees Daisy Group gain over 2,000 customers from fixed line telephony service provider for the healthcare sector and takes its spending to over £50 million in recent weeks

Daisy Group has acquired NEG MBO Two, a provider of communications services to the healthcare sector in the UK, for an initial cash consideration of £23.5 million.

The purchase follows Daisy Group’s acquisition of service provider SpiriTel for £27.3 million last month, taking its spending to £50.8 million in recent weeks.

NEG MBO Two provides network services, telephony hardware, installation and maintenance support to over 2,000 customers, 1,200 of which are GPs. The company trades under the ‘Surgery Line’ brand, which is designed specifically for GP surgeries and general practice.

Management accounts for the 10 months ended October 31, 2010 show NEG MBO Two has achieved EBITDA of £3.4 million to date and revenues of £11.2 million. Daisy Group added the company has good revenue visibility with an average remaining contract length of three years, and gross assets of £7.4 million.

Daisy Group chief executive Matthew Riley said: “The acquisition of NEG is a continuation of our stated consolidation drive in the fragmented reseller market. NEG has a proven track record for organic growth, further potential to grow, and provides the Group with a strong footprint in the market in which we believe we can increase market share further.

“Through this acquisition, we have acquired a large market opportunity and the potential to drive new verticals for the Group, giving us the ability to cross sell our data and mobile services and allowing us to provide a full unified business communications package to our enlarged customer base.”

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