In another wave of speculation about the future of Daisy, a report in the Financial Times says the Group is gearing up for a £1bn sale which could take place in March. Although scant on detail, this report follows a previous story that said Daisy appointed UBS and Oakley Advisory towards the end of 2017.
According to Daisy CEO Neil Muller in the report, the company plans to double in size within five years and could take advantage of a potential 'new wave of consolidation' in the industry.
Philip Carse, Principal Analyst at Megabuyte, believes that Daisy's financials could indicate an opportune time for the company to seriously consider its next big move: "Accounts to March 2017 only tell part of the picture given the significant acquisition of Alternative Networks towards the end of the year, but nevertheless show pro forma EBITDA of £111m on £699m revenues," explained Carse.
"The timing of a sale to trade or private equity would appear right for Daisy given that EBITDA is trending to almost treble the level prior to the 2015 take private."
Carse also noted that Daisy CFO Steve Smith reiterated 2017/18 guidance of £120m EBITDA on £700m revenues, with the EBITDA growth reflecting synergies, while flat revenues reflect some declines in Corporate (predominantly non-recurring project and product revenues) offsetting organic growth in SMB and Partner of 3%.
"However, following completion of the Alternative integration, Corporate is now expected to also grow organically, meaning that fiscal 2018/19 is likely to show revenue growth and continued synergy-driven margin expansion," added Carse.
"The obvious trade buyers for Daisy include Liberty Global/Virgin Media, Vodafone and possibly BT, as well as large Systems Integrators.
"A continuation of private equity ownership (perhaps the most likely option given the amount of money chasing assets) would almost certainly result in renewed M&A, now that Daisy has completed the integration of Alternative."
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