Melbourne IT has reached an agreement to acquire cloud services provider and domain registrar Uber Global for $15.5 million AU (approximately $12.2 million USD), the company announced Wednesday. In an announcement made via the Australian Stock Exchange, where it is listed, Melbourne IT reported the acquisition along with its 2014 financial results, and indicated its plans to continue growing its domains and hosting business.
Uber Global, which bears no relation to the similarly named ride-sharing app, serves a customer base of 70,000 plus over 400 resellers with domains, hosting and cloud applications, and white-labelled business services through channel partners and bespoke cloud solutions. The Uber website says that it is the country’s third largest cloud provider, and counts 110,000 customers altogether.
Uber Global operates the brands Uber Enterprise, Uber Wholesale, ilisys Web Hosting, and SmartyHost. The company has a forecasted EBITDA for the coming year of $2 million AU, and Melbourne IT figures that synergies will net it another half million once fully integrated in 2017.
Melbourne IT Chairman Simon Jones said, “Melbourne IT’s Board sees the acquisition as a major opportunity to achieve additional scale and to strengthen the core domains and hosting business. It also aligns with the Board’s stated requirement that such acquisitions be earnings accretive from day one.”
The acquisition is being funded out of existing cash reserves, which were bolstered by a year of major growth for Melbourne IT. The company reports that its financial year 2014 revenue was up 21 percent, and its net profit after tax rose 27 percent after normalization for its acquisition of Netregistry.
Melbourne IT purchased Netregistry for over $50 million AU in early 2014, which increased its scale and the breadth of its operations.
The profits and acquisitions mark a significant turnaround for Melbourne IT, which sold off its corporate domain name and online brand services divisions in 2013 in the wake of reporting disastrous financial results.
The Australian government plans to ramp up investment in cloud services with the help of an advisory board, for which it named the first 49 industry members last week. While neither Melbourne IT nor Uber Global is on the list, that does not prevent them from competing for government contracts in the future, and more companies are expected to be added.
While Melbourne IT has focussed largely on the SMB market in the past, it clearly has aspirations beyond its established strengths.