Webcentral, 5G Networks complete merger

ASX-listed hosting services provider Webcentral has completed its merger with telecommunications services company 5G Networks (5GN), four months after it was first announced.

The merger was officially implemented Tuesday, after Webcentral and 5GN shareholders overwhelmingly voted in favour of the merger on 3 November 2021, and was approved by the Federal Court the following week.

The new Webcentral shares will start trading on the ASX on Wednesday, 24 November, while the now-suspended 5GN will be delisted once approved.

First announced in July, Webcentral chief executive Joe Demase said the merger would allow for some operational alignment between the two companies, leading to some $2 million in annualised savings.

“This move eliminates the 45 percent of the shares for Webcentral and the $26 million debt that Webcentral owes 5GN,” Demase said at the time.

“As it was, the market was confused with how it was all operating and this will provide some clarity, especially around organisational structure. We knew Webcentral had a great underlying business, which we discovered in due diligence. It has the infrastructure and synergies.”

Demase has been at the helm of both companies since 2020, when 5GN acquired a majority stake in Webcentral after outbidding Web.com at the time. 5GN’s consideration was for one 5GN share for every 12 Webcentral shares, plus a loan to pay off its debts.

In an investor presentation posted on the ASX on Monday, the newly merged Webcentral stated that it will own and operate five data centres, 100GB of IP transit capacity, 100km of fibre optic connections installed, 50 connections to data centres across Australia and 900 terabytes of cloud capacity.

The company has some 350 staff across its various business units, namely cloud and hosting services, domain registrations, managed services, voice and data networks, data centres and digital marketing.

Looking ahead, Webcentral aims to continue integrating the two companies, including consolidating into one operating system and standardising products and services. It also looks to drive some new growth on sales of .au domain names and NBN services, while also expanding hosting offers and exploring potential acquisitions.