Home Listed Tech Melbourne IT acquiring digital marketing agency for $39 million

Melbourne IT acquiring digital marketing agency for $39 million

Melbourne IT acquiring digital marketing agency for $39 million Image courtesy of adamr at FreeDigitalPhotos.net Featured

ASX-listed Web hosting and domain registrar company Melbourne IT is paying $39 million to acquire digital marketing agency WME Group and subsidiary brands Nothing But Web and Results First.

The proposed acquisition will be funded through a combination of debt of approximately $9 million and a capital raising of $30.7 million.

The capital raising will be through an accelerated non-renounceable rights offer of one share for every existing seven shares at an issue price of $2.10, opening on 8 May and closing on 18 May.

The acquisition follows previous successful acquisitions in Melbourne IT’s Enterprise Services division, including the acquisition of Outware Systems for $57.84 million which was completed in February, and the acquisition of Infoready in March 2016 for $15.4 million.

Melbourne IT (ASX:MLB) chief executive Martin Mercer said the acquisition would build on the success the company had experienced to date in providing managed marketing solutions for small businesses.

“The Melbourne IT of today is almost unrecognisable from the Melbourne IT of three years ago," he said.

“WME Group is a logical and strong strategic fit with MLB, where managed marketing solutions are now the growth engine for our SMB division. We expect this powerful combination will enable us to grow ARPU at faster rates through enhanced cross-sell and customer retention, as well as boost critical capability in search engine optimisation solutions and advanced customer account management.”

Under the deal, key management of WME, which has offices in Melbourne, Auckland and New Zealand, will remain with the business.

Emma Hunt, managing director of Melbourne IT’s SMB division, said: “Australian small businesses are looking for a trusted partner to help them create an online presence, and then grow and thrive in this increasingly complex digital environment”.

“With the capability that WME Group provides, Melbourne IT is now unequivocally that trusted partner. The acquisition clearly aligns with MLB’s strategy of transitioning our SMB organisation into the leading digital solutions partner for small and medium businesses.”

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Peter Dinham

Peter Dinham is a co-founder of iTWire and a 35-year veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

 

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