Daisy Group Acquires ATC and Eurotel

Armed with a new war chest Daisy Group has announced that its wholly owned subsidiary has entered into agreements to acquire the trading assets of AT Communications Group plc and the trading assets of Eurotel Limited. The Board of Daisy is also pleased to announce the appointment of Ian Butcher as a non-executive director to the board, with immediate effect.

ATC has not fared well lately and had been struggling to pay off debts to keep shareholders happy. They sold Distribution business Rocom to Nimans in March this year.

In the year ending 31 December 2008, audited revenue and EBITDA for ATC’s continuing business were approximately £52.9m and £5.3m respectively. ATC subsequently announced on 1 June 2009 that these results included turnover of £6m which was accrued but not received as a result of a particular project delay. In the six month period ending 30 June 2009, unaudited revenue and LBITDA were approximately £19.9m and £(3.5)m respectively. The AT Communications Assets comprise three operating divisions, being network services, maintenance and consulting. ATC entered administration on 3 August 2009.

The consideration has been satisfied through the payment of £7.0m in cash and the issue of 1,169,591 warrants, exerciseable into one ordinary share in the Company at a price of 85.5p each.

Eurotel Limited is a telecoms and IT supplier based in Halifax, Yorkshire. In the year ending 31 March 2009, Eurotel’s unaudited revenue and EBITDA were approximately £30.2m and £3.5m respectively. In the three month period ending 30 June 2009, unaudited revenue and EBITDA were approximately £6.5m and £0.5m respectively. The Eurotel Assets have five principal revenue streams: fixed line calls, mobile telephone services, broadband services, and the sale and maintenance of telephone hardware. Eurotel entered administration on 3 August 2009.

The consideration has been satisfied through the payment of £13.5m in cash and the issue of 584,795 warrants, exerciseable into one ordinary share in the Company at a price of 85.5p each.

Ian Butcher was Group Finance Director of The Go-Ahead Group plc, one of the UK’s leading providers of passenger transport services operating in the bus, rail and aviation services sectors, between 1996 and 2007, taking a lead role in transforming it into a well-respected FTSE 250 company. His work there led to him being voted FTSE 250 and Overall UK FD of the Year in the CBI FD Excellence Awards in 2006.

Prior to Go-Ahead, Ian was Group Finance Director for Casket plc, the consumer products group, between 1990 and 1995, overseeing its rationalisation, successful turn-around and subsequent growth through acquisition. Previous experience includes a Finance Director role at Anglia Oils Limited. Ian qualified as a Chartered Accountant with KPMG where he stayed for 12 years and during which time he worked extensively in the corporate finance and restructuring fields. Currently, Ian is Non-executive Director and Audit Committee Chairman of Redhall Group plc, the engineering services business.

Commenting on the Acquisitions and the board appointment, Peter Dubens, Chairman, said, “The acquisitions of AT Communications and Eurotel support our strategy for providing a converged product set to this target market. This is a positive step in our growth plans.

“We are also pleased to welcome Ian Butcher to the Board. I believe Ian’s strong financial background and 22 years of experience of building up companies will make a significant contribution to the Company’s development going forward.”

Matthew Riley, Chief Executive Officer of Daisy, said: “These transactions are the first steps for Daisy in executing its strategy to consolidate the fragmented reseller market and become a dominant force in the SME and mid-market arena.

“Both companies have good reputations within the industry and, as part of the Group, will support Daisy in delivering an excellent service in all areas of communications, from product quality to customer service, further strengthening our converged product set and enhancing our offering to the UK business community.

“I’d like to thank the team for their efforts in the completion of both deals. Their hard work means we have been able to ensure customers of both businesses will suffer no loss of service.”