Broadcast Australia to buy Hostworks for $68.9m

Managed services provider has its eye on chasing international content provider markets

Broadcast Australia plans to acquire managed services provider, Hostworks, in an agreement worth around $68.9 million.

The Scheme of Arrangement is based on Broadcast paying $0.41 cash per share and is subject to shareholder approval. Hostworks managing director, Marty Gauvin, said the sale price represented an excellent return for shareholders.

"We were approached by them around the middle of the year to look at the possibility of a joint customer engagement. A lot of their customers are our customers as well, being TV and radio stations," he said. "In October they came to us with the idea of buying us and essentially creating a business to help content owners deliver their content to users. They already do that across the radio waves and this would give them that capability across the Internet as well."

A shareholder meeting will be held in February to vote on the deal.

Gauvin said the size of Broadcast Australia and its parent company, Macquarie Communications Infrastructure Group (MCG), would give Hostworks the opportunity to go after bigger pieces of business. It would also accelerate its three-year plan and financial objective to meet 15 per cent EBIT margin and grow as rapidly as possible.

"It delivers us some other markets immediately within Broadcast Australia and also the broader Macquarie group," Gauvin said. "It also means we can explore international opportunities quite effectively. MCG has global businesses, all of which have the same need as Broadcast Australia - to bring the Internet side of things into their content distribution business."

Gauvin said Hostworks will remain independent from Broadcast Australia and there would be no staff changes made during the acquisition process.

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