TalkTalk Business and ARO to borg into UK tech services giant

TalkTalk Business and UK technology services provider ARO are planning to merge, forming what they claim will be one of the country's largest communications and managed services companies. The combined entity is expected to have annual revenue of approximately £200 million ($270 million) and serve over 70,000 clients. According to analyst firm Megabuyte, ARO, formerly known as Arrow, is the larger business in terms of earnings, but the majority of the combined customer base will consist of TalkTalk Business's small-business clients.

The merger is anticipated to primarily generate revenue from fixed-line and mobile communications, as well as connectivity, accounting for roughly £130 million ($176 million). The remaining revenue will come from IT and cybersecurity services. Megabuyte predicts that the immediate focus will be on integrating the businesses and identifying opportunities to sell their services across the combined client base.

TalkTalk Business has a substantial number of small business customers, who are likely to be interested in ARO's mobile, Microsoft offerings, and other IT and cybersecurity services. The two companies describe their operations as highly complementary, with TalkTalk Business recently acquiring Planet IT, a service desk business offering IT support and professional services. ARO offers cloud, cybersecurity, and datacenter services, and is a Microsoft Solutions Partner.

The deal is currently pending approval under the UK's National Security and Investment Act (NSIA) due to ARO's involvement with some government clients, and is expected to conclude by the end of summer. Initially, both businesses will maintain their existing brands and offices while developing their integration plans, potentially leading to the elimination of duplicate products and staff roles.

The CEOs of both companies emphasized the significance of the merger, stating that it will create a stronger, more capable partner with broader capabilities and deeper expertise.