Iomart to buy server firm Melbourne for £7m

MANCHESTER-based web hosting company Melbourne is to be bought by listed cloud computing firm iomart for up to £7m.

Based at Manchester Science Park Melbourne was founded in 2000 by Daniel Keighron-Foster while he was still a university student.

It has more than 600 customers and operates its own datacentres in Manchester – which is an attractive proposition for its new owner.

Glasgow-based iomart said as well as additional datacentre capacity, the deal would provide a sales platform into the north.

Melbourne’s turnover in the year to 31 December 2011 was £2.9m with an ebitda of £630,000 and net assets of £0.26m.

Mr Keighron-Foster, 30, said: “I have spent over 10 years building a successful hosting company which prides itself on the reliable and personal service it gives to customers, which is something that iomart is also passionate about.

“I believe that Melbourne’s great local reputation and iomart group’s established status as one of the UK’s leading hosting providers will be a powerful combination and I’m looking forward to this next stage.” 

iomart said of the total consideration of £7m, £6.5m has been paid at completion, with two deferred amounts of £0.25m due; one contingent on the successful integration of the operations of Melbourne into the group; and the other contingent on the amount of net debt and working capital of Melbourne at completion.

iomart chief executive Angus MacSween said: “We are delighted to complement our continued organic growth by acquiring profit enhancing businesses.

“iomart has been looking for some time to acquire a quality managed hosting operation in the north of England to extend our UK coverage and Melbourne fits the bill perfectly, adding a strong customer list and additional datacentre capacity.”

Last year iomart bought Liverpool-based hosting services firm Switch Media for £1.25m in cash.

David Gorman, a director at Manchester-based Milkstone Stockbrokers said: “Iomart has been on the acquisition trail for some time now and this deal with Melbourne looks very sensible, both in terms of price and strategic fit. It’s also a fantastic outcome for Daniel and his team.”