Melbourne IT beefs up SMB division by acquisition

Published on the 03/05/2017 | Written by Newsdesk

Melbourne IT_Malcom Turnball

A company in which Australian prime minister Malcolm Turnbull once held shares is on a growth spurt…

ASX-listed Melbourne IT has revealed plans to acquire digital marketing solutions company WME Group for some $39 million. WME Group provides services including search engine optimisation, search engine advertising and web design through brands including WME, Nothing But Web and Results First.

In a statement, Melbourne IT (MLB) said the addition of WME Group to its stable is ‘expected to deliver significant benefits through scale and scope’ by strengthening its managed marketing capabilities and ability to provide online marketing solutions for small and medium sized businesses, which it said is ‘one of the fastest-growing segments of the technology industry’.

MLB got its start as a project which emerged from Melbourne University in the mid-1990s. Ahead of his political career, Turnbull held 8 percent of MLB. The acquisition is being majority funded by a rights issue and $9 million in debt.

Martin Mercer, CEO of MLB said, “The Melbourne IT of today is almost unrecognisable from the Melbourne IT of three years ago. This acquisition will build on the success we have experienced to date in providing managed marketing solutions for small businesses”.

He described WME Group as ‘a logical and strong strategic fit with MLB, where managed marketing solutions are now the growth engine for our SMB division’. “We expect this 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,” he added.

Emma Hunt is MD of the companies small to medium business division. “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 a market capitalisation of $220 million, MLB has a history of growth by acquisition, notably in its Enterprise Services division. At the start of this year it completed the purchase of Outware Systems for $57.84 million and last year bought out Infoready for $15.4 million, giving it capability in mobile, data and analytics, cloud and security.

WME Group has offices in Melbourne and Auckland, New Zealand.

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