Singtel-Trustwave Deal
Singtel to pay $810m for US cyber security firm TrustwaveReuters

Singapore Telecommunications (Singtel), Southeast Asia's biggest telecoms firm by revenue, has agreed to acquire US-based cyber-security firm Trustwave for about $810m (£545m, €747m).

The deal marks Singtel's biggest acquisition outside the main telecoms sector.

Singtel, on 8 April, said it will buy a 98% stake in Trustwave from a group of investors assembled by Trustwave chairman and CEO Robert McCullen. McCullen will hold the remainder.

Singtel said Trustwave is the largest independent managed security services provider in North America, with a presence in Europe and the Asia Pacific. The security firm's services span three areas: threat management, vulnerability management and compliance management.

Singtel, which owns stakes in regional operators including India's Bharti Airtel and Thailand's Advanced Info Service, said the deal will be funded through debt and cash.

It expects the acquisition to be completed in three to six months and add to earnings from the third year. Trustwave will continue to operate as a stand-alone business unit.

Singtel's stock was trading 1.36% lower at 3.17pm SGT in Singapore, while the broader Straits Times index was down 0.24%.

Digital aspirations

The deal comes as Singtel is moving away from being a pure-play phone company, to build a broader digital business that includes mobile video, digital advertising, and cyber security through partnerships with FireEye and Akamai, among others.

It also comes as the managed security services industry - which refers to the management of an IT system by a third party - is forecast to grow 15% annually from 2014 to hit $24bn in 2018, according to IT consultancy Gartner.

Chua Sock Koong, Singtel Group CEO, said in a statement: "We aspire to be a global player in cyber security. We have established a strong security business in the region, both organically and through strategic partnerships with global technology leaders.

"Our extensive customer reach and strong suite of ICT services, together with Trustwave's deep cyber security capabilities, will create a powerful combination and allow Singtel to capture global opportunities in the cyber security space."

Prior to the Trustwave deal, Singtel spent about S$900m ($663m) on acquisitions since 2012, mainly to build its digital business, Reuters reported.

Trustwave reported a revenue of $216m in 2014.

Last year, the Chicago-based firm withdrew an application with the US SEC to sell shares through an initial public offering, citing unfavourable market conditions.