Singapore Telecommunications Ltd. will buy a 98 percent stake in Trustwave Holdings Inc. for $810 million as Southeast Asia’s biggest phone company seeks to expand in cyber security.
The deal gives the company control of businesses in North America, Europe and the Asia Pacific region and is expected to add to earnings from the third year, SingTel said in a statement to the Singapore Exchange Wednesday. It will be the Singapore-based company’s biggest acquisition since the $9.69 billion 2001 takeover of Australia’s Optus, according to data compiled by Bloomberg.
SingTel is seeking new expansion as growth in its home market of Singapore slows and the company relies more on dividends from investments in emerging-market carriers including India’s Bharti Airtel Ltd. The company acquired Amobee Inc. in 2012 to add mobile advertising and last year bought digital marketing and content businesses Adconian and Kontera Technologies Inc.
“I would characterize this as more of an investment” than an acquisition designed to integrate with SingTel’s other businesses, Sachin Mittal, an analyst at DBS Bank Ltd. in Singapore, said by phone. “This is an exciting space -- the question is, is this the winning horse?”
Chicago-based Trustwave had net tangible liabilities of about $84 million and over three million business subscribers, it said.
Trustwave has only about 1.5 percent of the cyber security market and its advantages against larger competitors weren’t immediately clear, Mittal said.
Shares of SingTel fell 0.9 percent to S$4.38 at the close of trade in Singapore, paring this year’s gain to 12 percent.
“We have seen an increase in cyber attacks and many companies are seeking to protect their assets,” SingTel Chief Executive Officer Chua Sock Koong told reporters in Singapore. “This acquisition will help in capturing global opportunities in providing cyber security.”
SingTel was advised by Evercore Partners Inc.