Arq Group scouts out potential sale of SMB and Enterprise businesses

The dismantling of what was formerly Melbourne IT continues.

Arq Group, formerly known as Melbourne IT, has announced that it is looking into the potential sale of its SMB or Enterprise (ES) Division.

The company said the decision comes after receiving a "number of different inbound approaches" to acquire either of those businesses.

"Since the announcement of the Strategic Review, we have received a number of inbound approaches for both SMB and ES," Arq Group chair, Andrew Reitzer said.

"Both the SMB and ES businesses are strategic businesses in growth markets. With clear plans in place for improved performance, it is our intention to test the market for the sale of these businesses only where a divestment achieves appropriate value for shareholders."

As part of the review, Arq Group said it is now in the process of preparing information required to assess the potential sale, including the appointment of due diligence advisors and a data room. It is also undertaking a cost review program and has identified potential ongoing cost savings.

In addition, Arq Group reported its SMB division continues to trade in line with the previous guidance of between AU$9.7 million and AU$10.7 million of core underlying earnings before interest, tax, depreciation, and amortisation for the 2019 financial year.

Revenue for the same division is expected to be between AU$65 million and AU$70 million over the same period, the company said.

Last April, Melbourne IT rebranded to Arq Group, touted at the time that the name change would allow it to be a "full service digital partner".

The name change saw the Australian Securities Exchange (ASX)-listed company shift from one that sold and hosted domains to one that functioned as a "services and solutions" provider.

"Our market is changing. Our customers' needs are changing. And so we must change with them. Acquisition has always played an important role in our growth and evolution -- but never has it been more significant than in the past four years," the company wrote in its Brand Book [PDF].

"By forging them into a single, resonant brand, we will become more true to our vision, more capable of achieving our goals, and more able to offer our customers something truly unique."

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