TalkTalk intends to sell its direct B2B business to The Daisy Group for £175 million. The two companies have each signed heads of terms on a proposed deal which would transfer all existing TalkTalk direct B2B customers to Daisy.
The deal includes around 80,000 small, small to medium and large businesses, and TalkTalk says that this represents less than 20 per cent of the company’s B2B revenues. The transaction is subject to contract, with the intention to complete in late July 2018.
As an existing partner, Daisy would continue to serve all customers in this network. TalkTalk, meanwhile, would retain and continue to grow its core strategic partner and wholesale business. The proposed sale would negatively impact TalkTalk’s FY19 EBITDA by £15 million, but it would also further strengthen TalkTalk’s balance sheet, allowing more investment potential in sustainable growth and plans to build a new full fibre network to three million homes and businesses, in partnership with Infracapital (see TalkTalk in discussions for UK FTTP roll out) .
In a statement, TalkTalk’s chief executive, Tristia Harrison, said: ‘Last year we set out a strategy to radically simplify the business, focussing on fewer priorities that offer the best growth potential. TalkTalk has real strength in the partner and wholesale markets, where we have scale and a clear leadership position. It represents the vast majority of our revenue and profit and we see real opportunity to continue growing at pace. This proposed deal would allow us to focus on growth in those core B2B markets, whilst also removing significant complexity and cost from the business. As an existing strategic partner, Daisy is well placed to serve all direct customers, who would remain on our network and provide ongoing revenue.’