Domain registrar, Melbourne IT, has acquired UK-based domain management outfit, IDR Management Services. The acquisition is expected to be worth up to $2 million.
The price tag is based on a cash payment as well as an earn-out basis that will rest on revenue targets achieved over the next two years. Melbourne IT managing director, Theo Hnarakis, said even though IDR was a small company, it had a strong management team and a good portfolio of customers. Its 100 clients include Orange and Rothschild.
"They have a good brand and have been in this industry for about 10 years," he said. "We think we can take advantage of the IDR customer base by cross selling our services.
"There is a terrific synergy between the companies and the IDR business will slot in very nicely in our London operation."
Melbourne IT could offer IDR clients more consulting services such as monitoring for possible infringement, recovery and dispute resolution, Hnarakis said.
The company has about 400 customers in its corporate brand services division. From a profit point of view, he expected IDR to contribute to about $250,000 for this financial year.
"There is a whole range of other services that we can offer that IDR does not," he said. "We see this as an opportunity to up-sell those customers." All seven IDR staff will be kept on board. Melbourne IT has about 25 staff running its London operation.
Hnarakis said he was interested in acquiring more companies within the hosting and corporate brand services areas. Alongside the purchase, ASX-listed Melbourne IT also announced it would release its 2006 financial results on February 20.
He said preliminary results indicated all the divisions within Melbourne IT and WebCentral had slightly performed above expectation. The group expects to report gross earnings of more than $8 million.