Digital media and hosting provider, Destra Corporation, has spun off its Web hosting assets to freshly established interactive marketing company, BlueFreeway, for $20 million.
The deal comprises of an $18 million cash payment as well as $2 million in shares. It is subject to BlueFreeway listing on the Australian Stock Exchange.
Destra CEO, Dominic Carosa, said it had offloaded its hosting business to focus on digital media sales. Destra has acquired seven companies in that space in the past 12 months. Recent buys include Brand New Media, Payless Entertainment and Quickflix.
"We've been heavily focused on digital music for the last 12-18 months," he said. "We decided BlueFreeway was a better home for our hosting assets." Carosa highlighted BlueFreeway's move into ASP services as providing a strong foundation for its hosting business. Destra has about 13,000 hosting customers.
Under the agreement, Destra will still have an active involvement in the business and retains a seat on the BlueFreeway board.
"At the moment we're maintaining status quo; the name and management are the same for now," Carosa said.
Funds made through the sale would allow Destra to strengthen its balance sheet as well as pursue further acquisitions in the digital media market, he said.
BlueFreeway was established by former Citect CEO, Richard Webb to provider digital and interactive marketing and communications services. It is understood several established players are backing the company. It is expected to float on the stock exchange by early next year.
Destra's Web hosting business was one of several purchases on the cards, the company said in a statement.