Dunstone leads buyout of TalkTalk business division
The shareholders of TalkTalk, led by founder Sir Charles Dunstone, have set up a special purpose vehicle to acquire TalkTalk Business Direct (TTBD), the business and enterprise-focused connectivity provider, for £95 million.
TFP Telecoms Limited (TFP) has also signed a long-term exclusive wholesale agreement with TalkTalk’s wholesale platform worth c.£25m over three years.
TalkTalk Business Direct will continue to remain headquartered in Salford following the deal and will be led by managing director Ruth Kennedy.
The sale is the first phase of the demerger strategy reported on by TheBusinessDesk.com last week, and is in line with shareholders’ commitment to “support the separation of TTG into three separate businesses and the associated refinancing of those businesses on a separated basis”.
Tristia Harrison, TalkTalk Group chief executive, said: “The transaction delivers both investment for growth for Business Direct, as well as a long-term revenue agreement for our wholesale platform. This is good news for customers and colleagues alike, and is an important first step in our demerger plans.”
There had been speculation that a sales process was close to selling the division to Daisy or to Sky for up to £150m. TalkTalk insist the price of £95m has priced in the three year wholesale deal, which differentiates it from a valuation a third party buyer would pay.
At its heart, the issue is that TalkTalk is heavily indebted. In 2020 private equity firm Toscafund took TalkTalk private in a £1.1 billion deal.
TalkTalk Business Direct will continue to remain headquartered in Salford following the deal and will be led by managing director Ruth Kennedy.
TalkTalk confirmed last week that Harrison is to relinquish her role as group chief executive and that 50 jobs were at risk in Salford.
In a statement the company confirmed that Tom O’Hagan, founder of Virtual1 and current managing director of TalkTalk Business Wholesale, will be chief executive of the Wholesale Platform, while Adam Dunlop, the former managing director of iD Mobile and current managing director of TalkTalk Consumer and Supply & Partnerships, will be chief executive of TalkTalk Consumer.
