Private equity firm Inflexion has made a minority investment in Digital Wholesale Solutions (DWS) as part of a strategic partnership between the two companies. As part of the transaction, DWS will be demerged from Daisy Group with the majority of the shareholders of Daisy Group reinvesting directly into DWS.
The demerger, which values DWS at £1bn, is the final step in separating DWS from the Daisy Group. Terry O’Brien, CEO of DWS, will remain in post, leading the business with the support of his existing management team.
O’Brien explained, “The announcement today is brilliant news for DWS, brilliant news for our vendors and most importantly brilliant news for our partners. From the get-go, it was clear that Inflexion shared our excitement about the UK channel community and the huge potential for growth as SME’s increase their investment in digital technology. I’m delighted that Inflexion is joining our team, where we are obsessed with building a great channel-only business, delivering great products and a great experience for partners through a great platform.”
Matt Riley, founder of Daisy Group, will remain as chairman of DWS. He said, “In a fast moving, dynamic, highly competitive market, with customers demanding more from their partners, we made a strategic decision to separate our direct and indirect businesses to provide better focus and agility. The change has re-ignited the growth in all our businesses and today’s announcement is the next step on that journey. I’m delighted to welcome Inflexion onboard, who from first introduction recognised not only the quality of the DWS business but also its huge potential to grow in really exciting market conditions.”
Simon Turner, managing partner of Inflexion, added, “The business Matthew and his team have built up is testament to what the hard work of an ambitious entrepreneur can achieve. DWS is exceptionally well placed to continue its organic and acquisition led growth as it builds its market position further. We look forward to partnering with Matthew, Terry and the whole DWS team as they continue on their impressive journey.”
The investment is subject to regulatory approval. The principal advisors for DWS were Oakley Advisory, EY (Financial and Commercial due diligence) and Eversheds Sutherland (Legal). Principal advisors for Inflexion were Alantra (Advisory), PWC (Financial and Commercial due diligence) and Travers Smith (Legal)
DWS provides IT, communications and cloud products and services on a wholesale basis to over 6,000 UK partners, from vendors including Vodafone, O2, BT/EE, Microsoft, TTB and Virgin Media Business. Its services are targeted at resellers serving SME’s in the 10-250 employee range.