Melbourne IT Acquires Digital Marketing Agency WME Group

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Melbourne IT has agreed to acquire digital marketing agency WME Group for approximately AU$39 million ($29 million USD) to help it position itself as a market leader for small and medium-sized businesses, the company announced this week.

Melbourne IT now owns all shares of WME Group, along with its subsidiaries WME, Results First, and web design and development company Nothing But Web. The acquisition will add at least $6.5 to $7.5 million to Melbourne IT’s full year EBITDA, and 12 to 18 percent onto its share price, according to its projections.

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“The Melbourne IT of today is almost unrecognizable from the Melbourne IT of three years ago. This acquisition will build on the success we have experienced to date in providing managed marketing solutions for small businesses,” Melbourne IT CEO Martin Mercer said. “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 optimization solutions and advanced customer account management.”

The deal will be funded through a combination of debt and shares at the issue price of $2.10. Melbourne IT shares finished last week’s trading at $2.15 on the ASX.

Melbourne IT moved out of the wholesale domain reseller channel business a year ago, selling that segment to Tucows. Last month it mitigated a DDoS attack after a brief service disruption.

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