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
"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
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
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
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.