ASX-listed digital marketing company BlueFreeway has completed agreements to acquire Viva9 and the BlueArc Group.
BlueFreeway will acquire 100 per cent of Viva9, comprising cash and scrip issued over three years; and 51 percent of BlueArc, with additional payments as per the BlueFreeway earnout model over a three year period; for a combined sum of $6.1 million.
The acquisition of Viva9 and BlueArc Group takes the number of companies in the BlueFreeway Group to 16, six of which have been acquired since the company listed on the Australian Securities Exchange (ASX) in December 2006.
BlueFreeway CEO, Richard Webb, said the acquisitions cement the company's leadership position in Australia and positions it to take on international competitors.
"We are excited about taking Viva9's proprietary technology to Asia, Europe and the North Americas. BlueArc brings unique infrastructure development skills to the group that we identified as being core to our client offering and our expansion plans," Webb said.
Viva9 has aggregated a number of online marketing companies and is now one of the most significant players in Australia as well as a presence in China.
Viva9 has portfolio of over 2000 customers which include blue chip brands such as Citibank, ANZ, HSBC, Singapore Airlines, ACNielsen and Australia Post.
The company's CEO, Shane Murray, said the BlueFreeway group has a unique model that will allow Viva9 to accelerate expansion plans in Asia.
Established in 2004 and based in Sydney, the BlueArc Group is a provider of integrated technology and communications solutions.
Customers include Sunbeam, Nokia, Sensis, BHP Billiton and Nestle Australia.
The combined revenue of the two companies is forecast to contribute an additional $9.7 million to the BlueFreeway group, which represents a 28 percent increase on the company's pro forma revenue forecast of $34.5 million in the 2007 financial year.
The acquisitions expand BlueFreeway's suite of products and service offerings and positions the group as one of the most comprehensive digital marketing solutions providers in the world.
BlueFreeway last week announced an upgrade to its forecast earnings, which are anticipated to increase by 25 percent, from $3.6 million to $4.5 million for the period ending June 2007.
This upgrade was largely a result of organic growth across the first ten companies that made up BlueFreeway and represents a like-for-like (pro forma) basis increase in revenue and EBIT (excluding outside equity interest) by 66.7 per cent and 97.6 percent respectively, over the same period last year, compared to overall industry growth of approximately 55 percent per annum.
The impact of the Viva9 and BlueArc Group acquisitions was not factored into the earnings upgrade.