Melbourne IT to acquire UberGlobal Group

Company will spend $15.5 million on the cloud services provider

Melbourne IT (ASX:MLB) is set to acquire Canberra-based cloud services provider, UberGlobal Group for $15.5 million.

UberGlobal provides domain registration, hosting and cloud applications. It has 70,000 customers and over 400 resellers in Australia.

The sale is expected to be complete by 30 April 2015. Shareholders of UberGlobal will receive an additional payout if the company’s earnings before interest, tax, depreciation and amortisation (EBITDA) exceed $2.1 million.

Melbourne IT CEO, Martin Mercer, said that acquiring UberGlobal will expand its customers base and deliver benefits of about $2.5 million per annum.

Turning to the company’s financial results for the year ended 31 December, Melbourne IT reported revenues of $124.7 million, up from $103.4 million in 2013.

EBITDA was $12.8 million in 2014, up from $5.8 million the previous year. Meanwhile, net profit after tax (NPAT) was $7.9 million, up from 2013’s $6.2 million.

Commenting on the results, Mercer said he was confident in the company’s ability to drive growth and profitability.

“We have a significant market opportunity, a clear strategy, an extensive customer base and a strong balance sheet,” he said in a statement.

In November 2014, Melbourne IT invested $1.25 million in Melbourne-based social media marketing platform provider Tiger Pistol as the IT services firm looked to provide social media management services to customers.

In partnership with Tiger Pistol, it is assembling a suite of solutions for small businesses who want to “get found online”, Mercer said at the time.

“Many small businesses need help to successfully engage with their customers on social media. Tiger Pistol will enable us to manage a business’s social media presence and take advantage of advertising opportunities on social media,” he said.

Follow Hamish Barwick on Twitter: @HamishBarwick

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