Acquisition of minority stake in Daisy Group

RNS Number : 8375U

Oakley Capital Investments Limited

03 August 2015

 

3^rd August 2015

Oakley Capital Investments Limited ("OCIL")

Acquisition of minority stake in Daisy Group

Oakley Capital Investments Limited (AIM: OCL), the AIM-listed company established to provide investors with access to the investment strategy being pursued by Oakley Capital Private Equity L.P. ("Fund I") and its successor fund, Oakley Capital Private Equity II ("Fund II"), announces that Fund II has acquired a minority stake in Daisy Group Holdings Limited ("Daisy") from existing shareholders Matthew Riley and Toscafund Limited for a consideration of approximately £39m. The investment has been undertaken by Fund II following Daisy's recent acquisition of listed UK IT services company, Phoenix IT Group Plc ("Phoenix") for approximately £135 million, a transaction which created the first truly converged IT and unified communications company ("UCC") in the UK SMB and mid-market.

As a leading independent UK supplier of unified business communications and IT services and solutions to SMB and mid-market businesses, Daisy offers a comprehensive range of products and services including fixed line voice, data, hosting, mobile telephony, IT infrastructure and associated managed services. The business has an impressive track record for growth having successfully increased its market capitalisation from £204m in July 2009, to £494m in November 2014, immediately prior to the business being taken private by its current shareholders. OCIL is familiar with Daisy having previously held a 13.6% stake through Oakley Capital Private Equity L.P. ("Fund I"). For the six months ended 30th September 2014 Daisy reported unaudited Adjusted EBITDA of £25.8 million.

Oakley Capital Private Equity has a well-established track record in the Telecoms, hosting, Unified Communications and adjacent sectors through its investments in Host Europe Group, intergenia, and its prior investment in Daisy, investments that generated returns of 2.4 times, 2.5 times, and 35 times.

OCILs contribution to Fund II's equity investment, through its interest in Fund II, is approximately £14.9m. In addition, OCIL has provided £14.0m directly to Daisy in the form of mezzanine finance.

Commenting on the acquisition, Peter Dubens, Director of OCIL, said today:

"We are delighted to be acquiring a stake in Daisy - it is a business we know well and one that has created very significant value for OCIL in the past.  It is led by a highly respected management team that has recently completed the acquisition of Phoenix IT to create a leading UK Unified Communications and IT services business. We look forward to working with our fellow shareholders and the management team to generate further growth and value over the coming years."

Peter Dubens added: "Our long term commitment to successful sectors and entrepreneurs is a key feature of our investment strategy and returns profile.  We are delighted to be working once again with Matt Riley, one of the UK's leading TMT business builders."

Matthew Riley, Founder and Executive Chairman of Daisy Group, commenting on the recent Phoenix acquisition said: 

"The recent addition of Phoenix's strengths in IT services and solutions, particularly its managed and cloud services, has further strengthened Daisy's existing portfolio of products and services that represent the converging world of traditional telecoms and IT. We look forward to working again with Oakley and continuing our mission to provide essential services to our customers to allow them to run and grow their businesses."

For further information please contact:

Oakley Capital

[phone]

Peter Dubens (Director)

FTI Consulting LLP

[phone]

Ed Bridges / Emily Desmier

Liberum Capital Limited (Nominated Adviser & Broker) 

[phone]

Steve Pearce / Tom Fyson

About Oakley Capital Investments Limited ("OCL")

Oakley Capital Investments Limited is a Bermudan based company listed on AIM. OCL seeks to provide investors with long term capital appreciation through its investment in Oakley Capital Private Equity L.P. and Oakley Capital Private Equity II and, over time, through co-investment opportunities.

About Oakley Capital Private Equity 

Oakley Capital Private Equity II ("Fund II") is an unlisted mid-market private equity fund with the aim of providing investors with significant long term capital appreciation. The Fund's investment strategy is to focus on buy-out opportunities in industries with the potential for growth, consolidation and performance improvement. The Fund seeks to invest in companies with scale in their industry subsectors, thereby creating a sustainable earnings stream which should command a premium on exit.

Fund II is advised by Oakley Capital Limited, a privately owned asset management and financial advisory business with over $1 billion of assets under management which has a focus on investing in the telecoms, IT and media space.

 

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