Daisy set to acquire struggling TalkTalk's direct B2B business for £175m

Deal will see Daisy take on 80,000 TalkTalk business customers

Daisy is set to acquire TalkTalk's direct B2B business for a £175m, the struggling telco has said today.

TalkTalk announced the proposed sale as it published its financial results, which showed that revenue declined four per cent year on year during the period ending 31 March 2018.

Operating profit more than halved from £224m to £91m.

TalkTalk has spent the last year wading through restructuring plans in an attempt to reverse its fortunes, with the latest instalment of this seeing it agree to flog a chunk of its B2B business to Daisy.

The firm will hang on to its wholesale and indirect B2B businesses, with Daisy taking over the direct business of 80,000 corporate customers running on TalkTalk's network.

TalkTalk said this segment of the business equates to less than 20 per cent of its overall B2B revenue. The firm's corporate revenue was £373m in the reported financial year.

CEO Tristia Harrison said: "When we reset TalkTalk a year ago, we said we would focus on delivering sustained customer growth whilst radically simplifying the business. One year into the strategy, we are making good progress on both.

"Our customer base grew by 192,000 in FY18, underpinned by our unique propositions and our lowest ever churn. We have also made real progress in simplifying the business to focus on core, fixed connectivity.

"This will continue into FY19 with the sale of our direct B2B business, as we focus on cementing our position as the market leader in our core B2B markets, artner and wholesale, which represent over 80 per cent of our B2B business and continue to grow strongly."

Daisy declined to comment when contacted by CRN.

TalkTalk said it expects the acquisition to close in late July. It said the sale will knock £15m from its EBITDA in its current financial year, which ends next March.

TalkTalk's share price was up just over 10 per cent when the London Stock Exchange opened today, before falling just under 10 per cent over the rest of the morning.

Daisy has itself been the subject of sale rumours, with mulitple reports over recent months claiming a number of private equity firms are showing interest.