20 June 2011 | By Matt Byrne
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Telecoms provider Daisy Group is on an acquisition spree, which is just one of the tasks keeping general counsel David McGlennon on his toes.
Name: David McGlennon
Company: Daisy Group
Position: General counsel and company secretary
Reporting to: Chief executive Matthew Riley
Number of employees: 1,300
Annual legal spend: £600,000
Legal capability: Two
There are not many companies these days as acquisitive as telecoms provider Daisy Group, which means David McGlennon has had his hands full since joining from Eversheds as the company’s first general counsel in October 2009.
McGlennon, who also acts as Daisy’s company secretary, has overseen 13 of the 15 strategic acquisitions Daisy has made in recent years. They have included private company deals, business acquisitions and public takeovers.
The lawyer has also overseen a £75m refinancing, signing a three-year revolving credit facility with Lloyds, Yorkshire Bank and HSBC, plus the disposal of a number of non-core assets including WiMax spectrum licences for £12.5m and its WiFi business, which was bought by Daisy’s management team.
The acquisition strategy has helped turn Daisy into one of the UK’s leading providers, primarily to the SME market, of what it calls ”unified” communications, which covers fixed-line, mobile, data solutions and hosting services.
“Over time, as telecoms products have evolved, so have we,” explains McGlennon.
The significant development of Daisy has seen McGlennon, a corporate lawyer by training, face a raft of legal issues during his time at the company. They range from the day-to-day business of providing telecoms services such as commercial contracts, intellectual property, data protection as well as employment issues and regulatory matters.
“We’re regulated by Ofcom so I need to make sure we’re meeting our obligations,” he says, adding that as far as commercial work goes, “we’ll pick up as much as we can in-house”.
McGlennon kicked off his relationship with Daisy when he acted for it on its reverse takeover of Freedon4 Group in 2009 while still at Eversheds. The deal transformed the company into a fully listed business on the London Stock Exchange while a major fundraising provided a war chest for its aggressive acquisition strategy.
“The reverse takeover crystallised the need for an in-house capability,” says McGlennon.
While McGlennon has handled 13 acquisitions on his watch, Daisy has embarked on 15 major deals since its reverse takeover.
“With that amount of activity one of the difficulties has been balancing the need to service the existing organisation while having to oversee the execution of acquiring these businesses,” admits McGlennon.
To that end McGlennon decided to recruit an additional commercial lawyer, Nigel Smith from Addleshaw Goddard, who joined Daisy in April 2010. He had originally been on secondment to the company and clearly the use of secondments is something of which McGlennon approves.
“I don’t want to build a team that’s unsustainable, which is where using secondments is particularly useful,” he adds.
In fact, McGlennon admits he struck “a great deal” recently when he formed Daisy’s panel for external firms, both in terms of pricing
and specifically in relation to secondees.
“We ran the tender process for the full suite of legal work and certainly one benefit was that as part of the offering we had a great deal of flexibility with our secondees from Addleshaws,” says McGlennon. “There’s no retainer but we have the ability to draw down on a flexible basis free of charge, subject to a maximum amount of usage.”
The deal allows Daisy to, as McGlennon puts it, “chop and change” in relation to secondees, allowing it to supplement its resources as and when required. And, credit where credit’s due, the deal was suggested by Addleshaws.
“If you ask the right questions firms these days are more willing to be flexible,” confirms McGlennon.
McGlennon also decided there was sufficient legal need to form a panel, consisting of Addleshaws and Eversheds.
“For smaller work we also use Nicholas Fielden of Fielden Law,” he adds, referring to the Cobbetts spin-out firm.
McGlennon trained in the corporate team at Clifford Chance under partner Spencer Baylin and Dutch partner Joachim Fleury, now head of the firm’s international communications, media and technology practice.
He joined Eversheds as an associate after seven years at the magic circle firm in January 2006, later becoming a senior associate before joining Daisy.