Melbourne IT has taken a step towards completing its acquisition of digital marketing agency, WME Group, raising $30.7 million in fresh share offering on the Australian Securities Exchange (ASX).
The move brings the publicly-listed domain name registrar and IT services provider closer to building out its managed marketing capabilities, positioning the business as a leader in online marketing solutions for small and medium sized businesses (SMB).
“Our SMB division has changed considerably over recent years, and the acquisition of WME Group cements our place as a market leader in online marketing solutions for small and medium businesses, one of the fastest-growing segments of the technology industry,” Melbourne IT CEO, Martin Mercer, told shareholders.
The company unveiled plans to acquire the digital marketing agency at the beginning of May and the purchase was the main driver for the recent capital raising exercise.
The digital marketing solutions provider is expected to bring new capability to Melbourne IT, including search engine optimisation (SEO), search engine advertising and web design. WME Group’s market-facing brands include WME, Nothing But Web and Results First.
Run by founder and managing director, Nick Bell, WME Group evolved into one of Australia’s largest digital marketing agencies, now operating globally in seven countries with a turnover of $46 million.
Alongside scale and scope, the deal is aimed at strengthening Melbourne IT’s managed marketing capabilities in the SMB space.
At the time, Mercer said WME Group represents a “logical and strong strategic fit” with Melbourne IT, were managed marketing solutions are now the growth engine for the company’s SMB division.
“We expect this powerful combination will enable us to grow ARPU at faster rates through enhanced cross sell and customer retention, as well as boost critical capability in search engine optimisation solutions and advanced customer account management,” he added.
Speaking of the capital raising, Mercer said, “we are delighted with the support shown by our shareholders in this capital raising and excited by the positive response we have received from analysts, shareholders and the market at the tangible evidence of our transformation’s success, and the growing realisation that the Melbourne IT of today is not the Melbourne IT of old.”