TalkTalk agrees sale of direct B2B business to Daisy for £175m

TalkTalk and Daisy have signed Heads of Terms on a proposed deal which would transfer all existing TalkTalk direct B2B customers to Daisy, around 80,000 SoHo, SME and large enterprise clients which represent less than 20% of TalkTalk's B2B revenues. The transaction is expected to complete in late July 2018.

Daisy has been granted a period of exclusivity to conclude the proposed transaction.

Daisy is an existing strategic partner of TalkTalk so all customers will continue to be served by the TalkTalk network.

The sale enables TalkTalk to focus on growing its core strategic partner and wholesale business, offering services through over 800 channel relationships.

These channels represent over 90% of TalkTalk B2B customers and more than 80% of B2B revenue, with a strong two year growth CAGR of 11%.

The proposed sale would negatively impact TalkTalk's FY19 EBITDA by £15m and strengthen TalkTalk's balance sheet, which in turn allows for the continued investment in sustainable growth and plans to build a new full fibre network to three million homes and businesses, in partnership with Infracapital.

TalkTalk's Chief Executive, Tristia Harrison, said: "Last year we set out a strategy to radically simplify the business, focusing on fewer priorities that offer the best growth potential.

"TalkTalk has strength in the partner and wholesale markets. It represents the vast majority of our revenue and profit and we see an opportunity to continue growing at pace.

"This proposed deal would allow us to focus on growth in those core B2B markets while 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."

TalkTalk also announced that Charles Bligh will step down from the Board of the Company and as Chief Operating Officer on 30 June 2018.

He has been appointed the CEO of the new independent company proposed to be set-up by Infracapital and TalkTalk in respect of the proposed roll out of full fibre to more than three million homes and businesses in mid-sized towns and cities in the UK.