Melbourne IT has entered an agreement to acquire Uber Global, not to be mistaken for global ride-sharing app provider Uber.
The Australian internet services company announced on Wednesday that it had reached a deal to acquire Canberra-headquartered cloud services provider and domain registration provider Uber Global Group.
The Melbourne-based company, which is listed on the Australia Securities Exchange (ASX), told investors that it had entered into a Share Purchase Agreement for 100 percent of the issued capital of Uber Global.
According to the company, Uber Global has a number of brands, including Uber Enterprise, Uber Wholesale, ilisys Web Hosting, and SmartyHost. It also claims a 70,000-strong customer base, along with more than 400 resellers, said Melbourne IT.
On its website, Uber Global claims to be the country's third-largest cloud services provider by market share, delivering services to over 110,000 customers -- well in excess of the customer tally figure Melbourne IT gave to its shareholders.
The deal, which is expected to be complete by April 30, 2015, will have an initial value of AU$15.5 million.
Melbourne IT's CEO Martin Mercer said the acquisition would create further scale for its business, significantly expand its customer base, and strengthen the core domains and hosting business.
"The proposed transaction is consistent with the growth strategy approved by the Melbourne IT board," Mercer told shareholders, in an ASX release. "Acquiring Uber Global will significantly expand our customer base and deliver material synergy benefits of approximately AU$2.5 million [per annum]."
Melbourne IT's chairman Simon Jones said that the company's board sees the proposed acquisition as a major opportunity to achieve scale and strengthen its core domains and hosting business.
"It also aligns with the board's stated requirements that such acquisitions be earnings accretive from day one," he said.
The acquisition announcement comes as Melbourne IT releases its annual financial results for the year ending December 2014, reporting a 21 percent increase in revenue, compared to the previous year, to AU$124.7 million.
The company reported a 121 percent increase in earnings before interest, tax, depreciation, and amortisation to AU$12.8 million, with net profit after tax -- after normalising for impairment and transaction costs stemming from the acquisition of NetRegistry Group -- standing at AU$7.9 million, a 27 percent increase from the prior year's figure.
However, the company's profit after tax from continuing operations was down by 89.5 percent for the year, to AU$648,000. For the year ending 2013, the company reported AU$6.2 million in profit from continuing operations.
NetRegistry, which Melbourne IT acquired in March 2014, contributed revenue of AU$25.3 million, with net profit after tax for the business of AU$1.6 million.
Looking forward, Mercer said the company expects to see increased sales and profitability in the coming year.
"We have a significant market opportunity, a clear strategy, an expensive customer base, a strong balance sheet, and a renewed focus on execution," he said.
The latest acquisition announcement follows Melbourne IT's AU$1.25 million one-off investment during November last year in social media marketing platform, Tiger Pistol, in a bid to offer its SMB customers a social media edge.