Investment company Isec has announced it will purchase 57 per cent of Internet hosting company Hostworks, of which it already owns a 43 per cent share.
The transaction will result in the Hostworks business becoming a subsidiary of Isec, although Isec's directors plan to propose the entire company be re-named "Hostworks Group".
The rationale behind the merger is that the combined entity could consolidate its management and cash resources, and that Isec directors consider a pure-play Internet hosting business a more attractive opportunity to generate shareholder revenue than Isec's current investment business. The Hostworks data centre currently hosts some of Australia's largest sites, such as the ninemsn network and the Ticketek site.
Isec currently holds $3.5 million in cash reserves and will offer Hostworks shareholders a one-for-one share swap. The deal is yet to be approved by Isec shareholders.