UPDATED: Melbourne IT to spin off brand services unit
- 12 March, 2013 16:49
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Melbourne IT CEO Theo Hnarakis. Credit: Melbourne IT
Melbourne IT has confirmed it has sold its digital brand services division.
The web hosting and domain services company said it has completed a A$152.5 million cash sale to US-based Corporation Service Company.
The division, which does online brand protection, was originally created in 2008 when Melbourne IT combined its corporate brand services division with the Verisign DBMS business that was acquired for A$48.6 million
"The sale of DBS is a substantial result for shareholders," said Melbourne IT CEO Theo Hnarakis.
"While this was not a business that we had specifically earmarked for sale, given the value creation provided by the transaction, this was an opportunity which could not be ignored."
Melbourne had halted trading prior to the announcement, saying trading would resume after the release of an announcement about the outcome of its strategic operations review.
Melbourne IT began a strategic review in November. In a media conference last month about the company’s full-year 2012 results, Melbourne IT CEO Theo Hnarakis said the review was looking at “possibilities of unlocking value for shareholders and delivering more focused investments, execution and operations for customers and staff.”
Hnarakis said today that the company was "now concentrating on updating the strategic plan for the business following the divestiture so we can provide clarity to stake holders before the [annual general meeting] in May."
The company reported revenue and profit declines in 2012. However, Hnarakis said he was upbeat about the future due to an expected revenue boost from defensive domain registering and other activity associated with new global to-level domains expected to go live later this year.
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