Hostworks acquired for $69 million

ADELAIDE-based hosting and managed services firm Hostworks has been acquired by Broadcast Australia for $68.9 million.

Hostworks has been an industry pioneer, and is one of the largest full-service web hosting companies in the region. Its customer base includes NineMSN, ABC, SBS, News Ltd, Optus, and AAMI.

More than 15 per cent of all page views each month by Australia’s 10 million internet users are hosted by Hostworks.

Hostworks’ board of directors unanimously recommended that shareholders accept the Broadcast Australia offer. Major Hostworks shareholders including managing director Marty Gauvin and non-executive director Stephen Chapman granted Broadcast Australia an option over a 19 per cent parcel of Hostworks shares.

In the eight years since foundation, Hostworks has become recognized as Australia’s leading provider of managed services for on-line media and entertainment companies and management and hosting services for a broad range of critical applications.

“Broadcast Australia’s proposal represents an excellent outcome for our shareholders as well as providing significant benefits for customers and employees,” Mr Gauvin said in a statement.

Broadcast Australia is a wholly-owned subsidiary of the ASX-listed Macquarie Communications Infrastructure Group.

“We are pleased to have entered into an agreement to acquire Hostworks, which enhances Broadcast Australia’s core business of being a trusted provider connecting content owners to customers across multiple platforms,” said Broadcast Australia managing director, Graeme Barclay.

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Hostworks calls for strengthened backbone

THE Federal election ‘last mile’ broadband debate missed a more fundamental point, according to the region’s largest hosting and managed services provider: Australia does not have adequate backbone capacity.

Hostworks managing director Marty Gauvin warned the incoming Rudd Labor Government that Australia’s ability to compete internationally was being hindered by capacity problems in backbone infrastructure.

If fact, Mr Gauvin said if Labor successfully implements its ambitious ‘last mile’ plans, “it will create a massive online gridlock.”

“The critical issue is not how fast it goes into people’s houses: It is how fast it runs across the country and the speed of backbone data links for commercial service providers like Hostworks,” Mr Gauvin said.

Hostworks is one of the largest enterprise application outsourcing firms in the region, providing hosting and managed services to corporate customers like Network Ten, SBS, News Digital Media, ninemsn, realestate.com.au, SEEK, Ticketek.

“If Australia wants to succeed internationally as the online economy evolves, we need to start thinking much more innovatively. As well as building the infrastructure to support the online population we want, we need strategies to aggregate our online content to make it much more accessible and compelling,” he said.

Mr. Gauvin said the “choke points” created by broadband infrastructure represented a failure of market forces to deliver the best outcome for the country. “If we leave solving this problem to market forces, then Australia will just go backwards,” he said.

“The new government has an opportunity here to demonstrate real leadership. While the bulk of what online consumers want is overseas, Australia will continue to be diminished in its ability to have a content industry based here.

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