Melbourne IT to buy WebCentral

update Domain name giant Melbourne IT said today it would acquire Web hosting specialist WebCentral. In a statement sent to the Australian Stock Exchange (ASX), Melbourne IT chief executive Theo Hnarakis said his company had made a AU$1.

update Domain name giant Melbourne IT said today it would acquire Web hosting specialist WebCentral.

In a statement sent to the Australian Stock Exchange (ASX), Melbourne IT chief executive Theo Hnarakis said his company had made a AU$1.53 per share offer for WebCentral, in a deal understood to be worth worth AU$61.3 million.

The acquisition will be put to a meeting of WebCentral's shareholders for approval in late August, and would see Melbourne IT boost its employee headcount to approximately 400 worldwide. Combined revenues would be AU$130 million as at 2005.

In a telephone interview with ZDNet Australia this afternoon, WebCentral's chief executive Andrew Spicer said customers would not be unduly affected.

"From a customer point of view there'll be very little change," he said. "We're committed to delivering the same high levels of service that customers are used to."

Spicer declined to comment on any plans to merge the two company's infrastructure.

"We're just starting integration planning now. So it's really too early to say anything specific," he said.

He was similarly taciturn on his own fate, saying only the integration planning process would take into account senior management.

On potential staff redundancies, Spicer said "there will be some overlaps" between the two companies' workforces, but it was too early to say what the result would be.

The executive claimed WebCentral's staff reacted "well" after they were briefed on the buy this afternoon, "one minute after it went to the Stock Exchange", with further meetings being held later on today.

WebCentral has around 70,000 customers in total, ranging from large corporate and government bodies like Education Queensland and the Australian Rugby Union, to many small to medium enterprises (SMEs).

The acquisition will boost Melbourne IT's SME customer base by 25 percent to 300,000, the company said in its ASX statement.

"We've sent a note to all customers," said Spicer. "All our customer-facing staff are now talking to our customers. It's important to be proactive, I think."

While Spicer said the merger will take three to four months to take effect, with WebCentral's shareholders to vote on the deal in late August, the company's board is in favour of the deal.

WebCentral chairman Lucy Turnbull and director Sean Howard expected to join Melbourne IT's board after he acquisition is finalised, with Hnarakis continuing in his CEO and managing director role.

Spicer said WebCentral and Melbourne IT had been discussing a deal for some time.

"The last 18 months particularly we've been talking on and off. But I've known Theo for probably five years," he said.

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