Melbourne IT announced today it has reached agreement to acquire the WebCentral Group.
The deal will be voted on by WebCentral Group Shareholders at a scheme meeting to be held in late August 2006.
In a Webcast today, Melbourne IT CEO and managing director Theo Hnarakis said the proposed acquisition will bring together two of Australia's leading Web services businesses, generating significant benefits for customers, shareholders and staff of both companies.
Hnarakis said the proposed consideration values WebCentral Group shares at $1.53 each.
"The post merger group will bring together Melbourne IT's domain name and brand protection experience with WebCentral Group's hosting and business solution expertise to provide our channel partners and customers with a range of services to optimize their online success," he said.
"All WebCentral customers can be assured that they will continue to receive the high levels of service to which they are accustomed."
"With combined annual sales of over $130 million (as at 2005) and about 400 staff worldwide, the increased scale of the business will help facilitate an acceleration of innovation and investment in future growth," he said.
"Shareholders will benefit from the synergies in bringing two industry leaders together, while staff will have opportunities for career advancement with a recognized Employer of Choice," he said.
WebCentral Group chair Lucy Turnbull described the deal as an attractive offer.
"The board of WebCentral Group is excited about the prospects for the new merged business. This transaction will create a much larger company with greater scale and breadth of operations which will benefit both shareholders and customers. There are expected to be significant merger synergies," she said.
"The new enterprise will be a leading, publicly listed and substantially Australian owned online technology services company with a strong presence both nationally and internationally.
"WebCentral shareholders will also have the flexibility to choose the consideration alternative that best suits their investment preferences - either 63 or 93 cents cash per share, with the balance in Melbourne IT shares."