£135m Phoenix acquisition will make Daisy “truly converged IT” provider


Daisy Group completed its 48th acquisition last month as CEO Matthew Riley tries to create a £1 billion revenue UC business

Daisy Group has completed its £135 million takeover of Phoenix IT as it eyes becoming a £1 billion unified communications and IT business.

The purchase of managed services and cloud provider Phoenix is Daisy’s 48th acquisition since it was founded by CEO Matthew Riley in 2001, and is part of Riley’s strategy to turn Daisy into a “truly” converged IT and communications provider in the UK mid-market.

The deal was announced in May but completed on July 20 with job cuts expected as the two firms begin a 90-day integration period, according to Daisy Partner Services MD Ian Roberts.

Roberts said Phoenix IT gives Daisy access to more than 3,600 UK business customers to Daisy’s existing 60,000 base, and is particularly strong in the education, retail and financial services markets.

He said: “The acquisition is primarily to add additional capability, scale and customers to our corporate services and partner services business arms.

“Phoenix gives us more capability and scale around managed services, but it also gives us new capabilities such as business continuity, something Phoenix is well known for in the market. It also gives us additional penetration in the large outsourcing marketplace such as system integrators.”


He confirmed that Phoenix CEO Steve Vaughn will leave the company, with CFO Jane Aikman set to follow. Daisy’s Partner Services division will be integrated with Phoenix’s much larger equivalent unit, and will be headed by Roberts, with Alistair Blaxill of Phoenix set to exit.

The combined division will have around 1,400 engineers, but the Phoenix brand will be phased out entirely in the next three to six months. Some of Phoenix and Daisy’s sites could also be closed to find synergies. Riley, who took Daisy private in November last year as part of a £500 million management buyout, has made it his goal to turn Daisy into a £1 billion plus revenue company within the next few years.

Roberts said this was likely to mean more acquisitions for the firm in the future. He added: “We do expect there to be more acquisitions going forward.

“Phoenix represents a fairly significant acquisition for us so the next three months will be spent integrating the business and taking the value of both for- ward, but I do think their will be more purchases going forward.

“For now though we’re focussed on Phoenix and will be with their leadership team to look at their delivery and sales structure and determine what that is.

“We do expect there to be areas of job duplication and cost synergies in the business in both staff and other costs. Our strategy and one of the prime reasons for the acquisition is the capability of future growth, so we hope to realise the capacity for that.

“There is a great opportunity for continuity and to find crossover sales for our reseller base. It brings a greater penetration in the large SI and outsourcing marketplace for Daisy.

“Phoenix brings a lot of strong loyalty with existing partners. We can build on those relation- ships and implement the Daisy model of providing more flexible and tailored services across both businesses.”