The Life of Riley

How Daisy's Matthew Riley pulled off a deal he says will reshape UK business telecoms and technology

Hello Rainmakers,

We’ve got some insights today on one of the biggest deals of the year so far.

Yesterday, hours after signing off on the deal to merge his Daisy Group with Virgin Media O2, Matthew Riley carved out some time to talk to Rainmakers about what the deal means, and how it’s about more than just clearing his debt pile.

He’s not even the best known tech entrepreneur called Matthew who went to Fisher More High School in Nelson, Lancashire, but Daisy Group’s Matthew Riley may just have pulled off a deal to shake up the technology services market in the UK.

In a transformative deal that gives Daisy Group a third of a new entity comprising Virgin Media O2’s business operations, it appears at first sight to marry the nimble entrepreneurship of a regional tech champion with the infrastructure of two global telecoms giants.

In doing so it has placed the (still) Lancashire-based Riley at the helm of a newly merged business to become a pivotal player in the UK's small and medium enterprise (SME) technology market.

With annual combined annual revenues of around £1.4 billion, the new entity, formed of substantially all of Virgin Media O2 Business and Daisy Group, will be consolidated by Virgin Media O2 with Daisy Group holding a 30% stake.

Speaking just hours after inking the deal, and admitting to being somewhat exhausted, the chipper Lancastrian says the whole process required every bit of his northern grit.

For now the business will operate under its own existing brands, from their current office bases, but there will be a coming together under one brand eventually and he rather hopes it will be the Daisy name that lives on.

The corporate story of how the UK’s cable TV and mobile phone sector consolidated, and partnered with Virgin, one of the UK’s best known consumer brands, is long and complex, but in the 1990s the a disparate group of American telephone networks ploughed money into the UK as a reregulated market, literally digging up the streets to lay a new network.

A series of consolidations saw the ultimate owner Liberty Media take charge, later merging with Spanish owned O2, creating the sprawling business we see today.

The company will be supported by fixed and mobile connectivity wholesale agreements with Virgin Media O2, and supplier arrangements with Telefónica and Liberty Global to leverage high-growth products and services from across the portfolio of those wider shareholder groups.

Virgin Media O2’s fixed and mobile wholesale operations, which include smart metering and connectivity to MVNO customers, will remain fully owned within Virgin Media O2.

Splitting out the business to business element of the company creates what Riley says is something more acutely focused on the evolving technological needs of British businesses.

"What customers are asking for is one supplier to be able to supply multiple products, so they don't all point to each other and blame each other when it doesn't work," Riley explains with the same direct candour that has always defined his entrepreneurial career, from when he founded Daisy in 2001.

To read more, sign up for a subscription to Rainmakers.