TalkTalk Business and IT services provider ARO have agreed to merge, forming an independent connectivity and managed technology company with £200m in annual revenues, roughly 650 staff and more than 70,000 business and public sector customers across the UK.
The merger combines TalkTalk Business's national connectivity and data networking infrastructure with London-headquartered ARO's managed IT, cloud and cybersecurity operations. The enlarged group will serve over 70,000 organisations, positioning it as one of the larger independent players in UK managed technology services.
Financial terms of the combination, including the equity split between the two parties and any valuation placed on the merged entity, were not disclosed. Both businesses will continue to trade under their existing brands and from their current offices in the near term to preserve continuity for customers and staff through integration.
For TalkTalk Business, the deal accelerates a strategic shift from telco to full-service managed IT. It follows the unit's demerger into a standalone operating company from TalkTalk Group and its recent takeover of Oxfordshire-based IT provider Planet IT, marking a third step in a rapid buy-and-build sequence.
The £200m combined revenue figure gives the group meaningful scale in a fragmented market where mid-sized customers increasingly want a single partner spanning connectivity, cloud and security. The roughly 650-strong workforce brings together TalkTalk Business's network engineering with ARO's services and consulting teams.
"This is a defining moment for both ARO and TalkTalk Business," said Ciaran Rafferty, chief executive of ARO. "Together, we are creating a business with the scale, expertise and ambition to become a leading independent provider of connectivity and managed technology services in the UK." He said the combination would give the group "greater capacity to invest in innovation, service delivery and long-term customer success."
The transaction is subject to regulatory clearance under the UK's National Security and Investment (NSI) Act, with the review expected to conclude by late summer. The NSI referral reflects the sensitivity of national connectivity and cybersecurity infrastructure now falling under one owner.
Ruth Kennedy, chief executive of TalkTalk Business, framed the merger as "another important step in our transformation into a leading managed services provider," pointing to demand from organisations seeking partners that can combine strategic expertise and operational delivery "at scale."
The deal continues a wave of consolidation among UK managed service providers, as connectivity resellers and IT integrators combine to defend margins and cross-sell security and cloud into existing bases. For TalkTalk Group, carving TalkTalk Business into a standalone unit and merging it with ARO crystallises the value of an asset that had been bundled inside the wider, consumer-heavy telecoms operation.
*Original source: UKTN
