TalkTalk Business & ARO to merge in GBP £200m deal

TalkTalk Business and ARO have agreed to merge, creating a larger independent provider in the UK connectivity and managed technology services market.

The combined group will have about 650 employees, annual revenue of around GBP £200 million and a customer base of more than 70,000 organisations.

The transaction remains subject to approval under the National Security Investment Act, a process the companies expect to conclude by the end of the summer.

Both businesses will continue to trade under their existing brands initially and remain in their current offices while integration plans move forward.

The merger combines TalkTalk Business's operations in connectivity, networking and communications with ARO's cloud, cyber security and managed IT services. The enlarged group will serve organisations across the UK with a broader range of technology services.

For TalkTalk Business, the deal marks another step in its shift towards managed technology services following its separation from TalkTalk Group. It also follows the recent acquisition of Planet IT.

ARO has operated for more than 20 years and works with organisations in the public and private sectors. The company runs from eight locations across the UK and provides cloud, cyber security, networking, communications, data centre and managed IT services.

TalkTalk Business is based in Salford, Greater Manchester, and has more than 25 years of experience serving business customers. Its products and services cover internet access, data, voice and network infrastructure.

Merger rationale

The combination comes as telecoms and IT service providers seek broader product sets while customers buy more services from fewer suppliers. Across the sector, businesses have increasingly combined connectivity with cyber security, cloud and outsourced IT support as demand shifts beyond traditional telecoms.

That trend has pushed UK service providers to use acquisitions and mergers to add specialisms and cross-sell to existing customers. In this case, the companies are bringing together complementary parts of the market rather than overlapping telecoms networks.

ARO Chief Executive Officer Ciaran Rafferty said: "This is a defining moment for both ARO and TalkTalk Business. 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.

"By bringing together our complementary strengths, we are creating a stronger partner with broader capabilities, deeper expertise and greater capacity to invest in innovation, service delivery and long-term customer success."

TalkTalk Business Chief Executive Officer Ruth Kennedy said the deal formed part of the company's ongoing repositioning.

"This merger represents another important step in our transformation into a leading managed services provider and brings together two highly complementary businesses to create a leading independent technology partner for UK organisations.

"The market is evolving rapidly, with organisations increasingly seeking technology partners that can combine strategic expertise, operational excellence and broad service capabilities at scale. This combination creates a business that is uniquely positioned to meet those expectations and support customers across every stage of their technology journey.

"We are creating a platform with the scale to invest, innovate and grow. Together, we have an exciting opportunity to play a leading role in the future of the UK technology services market."

The enlarged business will initially preserve continuity for customers, staff and partners by keeping both brands in place. Existing office locations will also remain unchanged during the early stages of integration.

The deal adds to a period of change for TalkTalk Business as it expands beyond its traditional telecoms base. For ARO, the merger places the company within a larger group with wider reach across UK business customers.

If approved, the transaction will create a combined provider with more than 70,000 organisational customers and annual revenue of about GBP £200 million.