Australian Securities Exchange (ASX)-listed Dreamscape Networks (ASX:DN8) has spent $4.45 million buying the entities and business assets of Sydney-based Enetica Group in a deal that includes Web City, Enetica and Host1.
Enetica Group is a hosting and domain business, privately held by Bucan Holdings.
The acquisition is expected to expand Dreamscape’s hosting footprint in Australia and the business will be integrated into its Net Logistics infrastructure, operations and management, which is expected to take place by March next year.
The $4.45 million will be funded in cash from existing available free cash and a short term (six month) unsecured loan of $3 million provided by Cloudsafe Holdings, which is a company associated with Dreamscape managing director, Mark Evans.
Enetica Group has more than 15,000 customers and 70,000 registered domains with hosting accounting for about 76 per cent of its revenue. In 2002, it became the first new fully accredited registrar following the open tendering of the .au domain market. During the 2017 financial year, Enetica generated $3.3 million in revenue and $1.3 million in pro forma EBITDA.
In a statement, Evans said this marked Dreamscape Networks' third strategic acquisition since it was listed on ASX in 2016.
The deal comes several months after the company acquired Australian hosting provider, Net Logistics, which counts Equinix, IBM and Cisco among its vendor partners.
More recently, the company acquired Singapore-based hosting and domain provider, Vodien Group, for $29 million – with the latter acquisition aimed at helping propel the company’s South East Asia growth strategy.
“Having successfully integrated Net Logistics, the acquisition of Enetica Group is where the synergies of our growth strategy really start to come to life in Australia,” Evans said.
“Bolting Enetica Group into Dreamscape Networks will allow us to harness the capability inherent in our previous two acquisitions, Net Logistics and Vodien. We will utilise the upgraded Net Logistics technology platforms, while improving customer service and marketing capabilities by harnessing the Vodien brand to bring increased value to current Web City customers."
Evans said it was a great opportunity to improve its product mix for all of its Australian customers and provides increased scale to provide additional add-on value products to improve customer engagement and average bookings per user (ABPU).
The acquisition is expected to be completed by 31 October.
The latest acquisition deal comes just weeks after DreamScape Networks secured a cool $20 million to kick off a series of fresh acquisitions, as it works to transform itself into a fully-fledged online solutions provider.
The Perth-headquartered tech firm, which is the parent company of domain registrar, Crazy Domains, told shareholders on 13 October that it had approved commercial terms and conditions for a $20 million three-year cash advance facility with a “major Australian bank”.