Continue reading this on our app for a better experience

Open in App
Floating Button

ST Engineering acquires StarHub’s D’Crypt for $67.5 mil to boost cyber capabilities

Felicia Tan
Felicia Tan • 3 min read
ST Engineering acquires StarHub’s D’Crypt for $67.5 mil to boost cyber capabilities
The transaction is expected to be completed in the first quarter of 2024. Photo: ST Engineering
Font Resizer
Share to Whatsapp
Share to Facebook
Share to LinkedIn
Scroll to top
Follow us on Facebook and join our Telegram channel for the latest updates.

Singapore Technologies Engineering’s (ST Engineering) cyber business, ST Engineering Info-Security, has agreed to acquire 100% of the shares of D’Crypt for a cash-free and debt-free purchase initial consideration of $67.5 million. There will also be an earn-out consideration of $5 million which is conditional upon meeting the stipulated earn-out milestone.

The conditional sale and purchase agreement (SPA) was signed with Keele, a special purpose vehicle (SPV) and an indirect subsidiary of telco StarHub CC3

. Keele’s shareholders are Ensign Asia, an indirect wholly-owned subsidiary of Temasek Holdings, and StarHub’s direct subsidiary, Ensign InfoSecurity. Ensign Asia holds all the ordinary shares in the issued share capital of Keele while Ensign InfoSecurity holds all the preference shares in Keele.

D'Crypt was established in 2000 and specialises in cryptographic technology design and offers solutions in encrypted communications, single chip crypto token, secure computing and high-performance computing.

According to ST Engineering, the proposed acquisition is in line with its strategy to grow its cyber business and expand into new market segments.

“The addition of D’Crypt to our cyber business significantly augments our cryptographic and quantum capabilities, expanding our encryptor product offerings and enhancing our expertise in cybersecurity. This strategic addition strengthens our talent pool in cryptography and cybersecurity,” says Goh Eng Choon, president of ST Engineering’s cyber business.

“As a combined business, we are poised to leverage synergies from our complementary strengths and advance the development of dual-use cyber technologies for critical infrastructure and enterprise. This puts us in good stead to deliver cutting-edge cyber and encryption solutions to a broader spectrum of customers, addressing their challenges posed by today’s heightened cyber threat environment,” he adds.

See also: Singtel to sell mobile wallet Dash to Western Union Testing QA

Based on D’Crypt’s unaudited financial statements for the 1HFY2023 ended June 30, its book value and net tangible assets (NTA) stood at $48.1 million and $46.1 million respectively. The company operates profitably at the entity level.

ST Engineering expects this proposed acquisition to be cash flow positive from the first year. The group expects the proposed acquisition to be earnings accretive by the second year after the completion, after factoring in financing cost, transaction and integration expenses and amortisation of intangibles.

The transaction is expected to be completed in the first quarter of 2024.

See also: Ever Glory United acquires fire protection services business for base amount of $4.2 mil

As Keele is an indirect subsidiary of Starhub and an associate of Temasek and Temasek being a controlling shareholder of ST Engineering, the proposed acquisition constitutes an “interested person transaction” (IPT) under Singapore Exchange S68

’s (SGX) listing rules.

ST Engineering says it has already obtained confirmation from SGX that it has no objection to ST Engineering’s use of the average of its daily end-of-day market capitalisation for the month of December 2022 as an alternative reference point instead of using its latest audited consolidated NTA to determine the materiality of its IPT under the listing rules for the FY2023 ending Dec 31.

Shares in ST Engineering and StarHub closed at $3.78 and $1.10 respectively on Dec 12.

Highlights

Re test Testing QA Spotlight
1000th issue

Re test Testing QA Spotlight

Get the latest news updates in your mailbox
Never miss out on important financial news and get daily updates today
×
The Edge Singapore
Download The Edge Singapore App
Google playApple store play
Keep updated
Follow our social media
© 2024 The Edge Publishing Pte Ltd. All rights reserved.