FTR acquires rest of WebCentral: UPDATE

FTR Holdings has signed an agreement to buy the remaining 50.6 percent of Queensland webhost and ASP WebCentral for $19.6 million.

That 50.6 percent had been held by its three founding directors, Lloyd Ernst, Byron Newton and Joe Altoff. The $19.6 million comprised $18 million in cash, two million FTR shares and two million FTR options, WebCentral said in a statement to the ASX this morning.

Lucy Turnbull, former Lord Mayor of Sydney and the new chair of FTR Holdings, told CRN that the digital audio court-reporting company would take on WebCentral's web hosting as a second strong bowstring.

"[WebCentral] is a terrific Australian success story," she said. "It has a real track record of growth, a fantastic community of people and a terrific technology platform."

Turnbull said that WebCentral's 200 staff would each get up to 1000 shares in FTR as a result of the acquisition.

"We have to think about whether we change our name to WebCentral," she said. "It's a very strong brand and great Australian technology."

Brisbane would remain the company's headquarters for the foreseeable future, but FTR would work to develop WebCentral's role nationally, Turnbull said.

However, Ernst, Newton and Altoff planned to move out of their executive positions within WebCentral. All would continue to be associated with the company through both shareholdings in FTR and the provision of consulting services, the company said.

Lloyd Ernst, CEO at WebCentral, said he was focusing on the needs of WebCentral through the transition period. He had made no plans yet for his life after relinquishing the helm.

"We always realised what the end-goal was. That's why we put Andrew Spicer and Andy Kent on. But I don't really have any committed plans -- maybe I will in a few months' time," Ernst said.

Andrew Spicer, COO at WebCentral since 2000, would take over from Ernst as CEO. "Actually, it's going to be a terrific time taking WebCentral to the next level," he said.

Spicer said WebCentral's EBITDA had grown from $110,000 a year ago to $9.9 million today. The ASP wanted to maintain and strengthen its work in web hosting for SMB, corporate and government clients and with its partners.

"We have got some great wholesale relationships," he said. "We have grown revenue 28 percent year on year."

Overall, it was expected to be "business as usual" for customers and partners with WebCentral's plans to further develop and release hosted applications and services staying on track, Spicer said.

WebCentral has been investing in products and systems it believed would help it take advantage of converging factors such as increased broadband adoption, the maturity of the ASP business model, centralisation of IT infrastructure and utility computing.

WebCentral began in 1997 as part of PowerUp. It claims today to be Australia's largest web host, with revenues of $36.9 million for the 2003-04 financial year.

WebCentral hosted more than 60,000 sites and domains for SMBs, corporations and government departments, the company said.

Malcolm Turnbull, the former chair of FTR Holdings, had stepped down to pursue his political career, Lucy Turnbull added.

Lucy Turnbull is a solicitor by profession and a director of investment banking firm Turnbull & Partners. She has been a director of FTR since 1997. She was Lord Mayor of the City of Sydney from 2003 to 2004, when she was ousted in a coup.