Melbourne IT acquiring digital marketing agency for $39 million

The proposed acquisition will be funded through a combination of debt of approximately $9 million and a capital raising of $30.7 million.

The capital rising will be through an accelerated non-renounceable rights offer of one share for every existing 7 shares at an issue price of $2.10, opening on May 8 and closing on May 18.

The acquisition follows previous successful acquisitions in Melbourne IT’s Enterprise Services division, including the acquisition of Outware Systems for $57.84 million which completed in February this year, and the acquisition of Infoready in March 2016 for $15.4 million.

{loadposition peter}Melbourne IT (ASX:MLB) CEO Martin Mercer says the acquisition will build on the success the company has experienced to date in providing managed marketing solutions for small businesses.

“The Melbourne IT of today is almost unrecognisable from the Melbourne IT of three years ago.

“WME Group is a logical and strong strategic fit with MLB, where managed marketing solutions are now the growth engine for our SMB division. We expect this powerful combination will enable us to grow ARPU at faster rates through enhanced cross sell and customer retention, as well as boost critical capability in search engine optimisation solutions and advanced customer account management.”

Under the deal key management of WME, which has offices in Melbourne, Auckland and New Zealand, will remain with the business.

Emma Hunt, Managing Director of Melbourne IT’s SMB division, said: “Australian small businesses are looking for a trusted partner to help them create an online presence, and then grow and thrive in this increasingly complex digital environment”.

“With the capability that WME Group provides, Melbourne IT is now unequivocally that trusted partner. The acquisition clearly aligns with MLB’s strategy of transitioning our SMB organisation into the leading digital solutions partner for small and medium businesses.”