The board of Phoenix IT Group have recommended a takeover offer from B2B telco Daisy Group and private equity firm Toscafund to it its shareholders.
Daisy and Toscafund are bidding £1.60 for each Phoenix share, a 24% premium on the target’s share…
The board of Phoenix IT Group have recommended a takeover offer from B2B telco Daisy Group and private equity firm Toscafund to it its shareholders.
Daisy and Toscafund are bidding £1.60 for each Phoenix share, a 24% premium on the target’s share price the day prior to the possibility of a takeover becoming public, which values the company at £135m (US$206m).
Phoenix’s directors, advised by Investec, believe that while the company can still grow independently, a sale to Daisy would give shareholders the opportunity to “realise the value from their investment in cash immediately and at an attractive premium”.
Explaining the rationale for the transaction, Daisy’s founder and CEO Matthew Riley said it built “upon the corporate acquisition strategy that Daisy has successfully executed, and continues to follow, in order to offer a diverse product portfolio as a leading UK supplier of unified business communications solutions to SMEs and mid-market businesses”.
Riley added that he believed the takeover created the “opportunity to become the first truly converged IT and unified communications provider in the UK mid-market”.
“The addition of Phoenix’s strengths in IT services and solutions, particularly its managed services and rapidly expanding cloud services, will further strengthen Daisy’s existing portfolio of products and services that represent the converging world of traditional telecoms and IT.”
The agreement between Daisy and Phoenix expires on 27 September, but the parties hope to complete the deal in late July.
Daisy, which provides hosting, broadband internet and voice services, was advised by Goldman Sachs. Provided Phoenix shareholders take up the deal, it will mark the Lancashire-based group’s second takeover this year. In January it swallowed up communications solutions company Damovo for an undisclosed sum.
Last October, Daisy was sold in a £494m (US$797m) management buyout to Riley, Toscafund, and Penta Capital; another private equity firm. The new owners de-listed Daisy from AIM in January. While it was still trading, the telecoms provider had a market capitalisation of about £500m (US$756m).
