SingTel buys US cybersecurity group for $810m

Singapore Telecommunications is broadening its cybersecurity footprint with the $810m purchase of Trustwave, a US cloud-based service, as Southeast Asia's largest telecoms group looks to expand beyond its borders and its core business.

The deal is SingTel's first acquisition in the industry following a series of strategic partnerships and initiatives.

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

SingTel will acquire 98 per cent of the equity for $810m with the other 2 per cent remaining with Robert McCullen, Trustwave chairman and chief executive. The deal gives the company an enterprise value of about $850m.

Trustwave, which is headquartered in Chicago and has 1,200 employees across 26 countries, will continue to operate as a standalone company, SingTel said. It is the largest independent managed security services provider in North America, which accounts for three-quarters of its sales.

The global market for cybersecurity services is growing at a compound annual rate of 15 per cent and is expected to become a $24bn market by 2018, as companies respond to the rising online risks to their business.

Trustwave operates the Trustkeeper brand and focuses on management of threats, vulnerability, and compliance. It also operates a forensic research facility called SpiderLabs.

SingTel said there was "huge demand" from its Asia-Pacific customers for such services and that it planned to use its existing reach in the region to expand Trustwave's market.

"Our extensive customer reach … 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," said Mr Chua.

The deal, contingent upon approval from regulatory groups including the US Committee on Foreign Investments in US (CFIUS), is expected to close in less than six months, SingTel said.

SingTel has long pursued a strategy of expanding into other markets and industries. Last year, it made its largest acquisition yet in digital marketing, spending $385m on two companies bought through Amobee, its Silicon Valley-based subsidiary.

Shares in SingTel were down 1.1 per cent midday on Wednesday in Singapore versus a 0.2 per cent decline for the broader market.

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