Last November, the company announced an operational strategic review. March 12th signalled an ASX trading halt. Melbourne IT CEO Theo Hnarakis said:
“While this was not a business that we had specifically earmarked for sale…this was an opportunity which could not be ignored.”
Net proceeds from the sale are dependent on the company’s capital gains tax liability, plus associated adjustments. Proceeds are expected to be in the vicinity of $135-140 million. The magnitude of the transaction ensures plentiful opportunity for printing services to provide Stationery printing and digital Business Cards.
Jim Stoltzfus, vice president of Corporation Service Company, is anticipating a compatible combination with Melbourne IT. Hnarakis said his board are focusing on providing clarity for company shareholders prior to the May AGM. He is confidant of company management providing clear focus in the execution of future strategic plans.
DBS began in 2008 as a consultancy service providing brand protection. Melbourne IT has suspended its Dividend Reinvestment Plan during the strategic review. The trading halt will remain in place until the company makes a further announcement. At the time of its review in 2012, Melbourne IT had considered selling offshore, mostly due to a downturn attributable to project setbacks with several clients.
The sale augurs well for continued expansion of Melbourne IT, related companies, and Melbourne business confidence in general.
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