Daisy Group’s £27m purchase of SpiriTel

Daisy Group takes a business with a turnover of around £30 million and 200 staff at offices in London, Cardiff, Wigan and Glasgow. SpiriTel is organised into SpiriTel Business, which sells voice and data services to businesses, and SpiriTel Technologies, focused on infrastructure and wholesale voice services.

SpiriTel Business, the company’s main trading unit, was set up in 2007, a year after Alastair Mills was appointed chief executive. Since, it has bought 12 other reseller companies and recently reported organic growth of 15 per cent. SpiriTel said cross selling between its mobile, fixed and IP units has enabled the increase.

This is the largest acquisition the Company has made. It gives Daisy a strong foothold in the mid-market, strengthening our sales team and engineering force.
SpiriTel non-executive chairman Lord St. John of Blesto said: “The offer recognises the value created by our strategy of acquiring and integrating 12 businesses since 2006. Daisy will benefit from the customer base and cross selling culture the management team has built.”

Mills said: “The management has executed a comprehensive turnaround strategy to the point where we have now sold a business of genuine scale that competes for and wins major contracts with major businesses.”

Investors’ returns
The deal provides a substantial profit for private equity group Penta Capital, which originally invested in the service provider in 2003 and led a £10 million fundraising in November 2009.

Penta Capital partner Steven Scott said: “This was a difficult investment in the early years, which the current management team completely transformed, with our support, into a dynamic buy-and-build group in a rapidly consolidating sector. Twelve acquisitions were integrated quickly and effectively on a relatively ungeared basis and, despite the economic uncertainty, the team delivered organic growth alongside the acquisitions.”