Melbourne IT is set to acquire Cloud services provider Uber Global for $15.5 million as it posts a net profit of $7.9 million in its 2014 full year results.
The company has entered into a share purchase agreement for the purchase of 100 per cent of the issued capital of Uber Global.
The deal will have an initial value of $15.5 million, with a potential earn out to follow based on EBITDA performance to June 30, 2015.
Melbourne IT chief executive, Martin Mercer, said the proposed transaction is consistent with the growth strategy approved by the board.
"Acquiring Uber Global significantly expand our customer based and deliver material synergy benefits of approximately $3.5 million per annum.
Melbourne IT chairman, Simon Jones, said the board sees the acquisition as a major opportunity to achieve additional scale and to strengthen the core domains and hosting business.
"It also aligns with the board's stated requirement that such acquisitions be earnings accretive from day one.
It will be funded from existing cash reserves.
In its full year results, the company recorded strong increases in revenue, up 21 per cent to $124.7 million and EBITDA, up 121 per cent $12.8 million.
Net profit after tax was up 27 per cent to $7.9 million.
The board has declared a final dividend of $0.04 per share (80 per cent franked).
Mercer said the results were supported by the full year impact of cost savings realised in late 2013 and the acquisition of Netregistry.
He said that total synergies of $7.5 million were anticipated from the integration of Melbourne IT and Netregistry.
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"We are confident in our ability to drive growth and profitability at Melbourne IT," he said.
"We commence 2015 with our new management team and a clearly articulated plan for future growth.
"We have a significant market opportunity, a clear strategy, an extensive customers base, a strong balance sheet, and a renewed focus on execution."