Singapore Telecommunications (SingTel) is expanding its services into other ventures, namely "digital life" and cyber security, allowing itself to deviate its focus from delivering pure-play services.
So far, the company has been engaging in deals and partnerships to achieve goals and internal growth. The plan to acquire Trustwave Holdings is the latest partnership deal that can allow the company a stronger presence in the field of cyber security.
The deal, which reportedly cost $810 million, will give the company added control of businesses in Europe, Asia Pacific and North America. It is also expected to bring in higher earnings.
The deal is expected to be finalized within a timeframe of three to six months. Just like any other acquisition venture, it has to be approved by U.S. authorities as a regulatory measure.
"We have seen an increase in cyber attacks and many companies are seeking to protect their assets," said Chua Sock Koong, CEO of SingTel. "This acquisition will help in capturing global opportunities in providing cyber security."
Trustwave is a Chicago-based company that helps firms to fight cybercrime. It also provides data protection, database scanning, payment compliance and security risk reduction services. Operating in 26 countries, it currently has three million subscribers and 1,200 employees.
"Trustwave and our current partnerships with cybersecurity firms like FireEye and Akamai give us better coverage on the ground of the cyber threats organizations face," said Bill Chang, SingTel chief executive Group Enterprise. "This enables us to provide better cyber protection for our customers."
In 2014, Trustwave reported revenue of up to $216 million, 75 percent of which was contributed by the North American market. The company will continue to operate as an independent firm after the acquisition by SingTel.
The acquisition will also allow Trustwave, which has around 1.5 percent of the cyber security market, to "broaden its overall security portfolio and address the fast-growing emerging security market opportunity in the region."
The deal on SingTel's acquisition of Trustwave is advised by the Asian unit of U.S. investment bank Evercore.
Trustwave has a total valuation of $850 million. The deal would allow SingTel a 98 percent stake in the company. The rest will be held by Trustwave founder and also its chairman and CEO Robert J. McCullen.
"We're very happy that Rob is investing in the company with us," said Chua. "We see it as a clear signal and his commitment to work with SingTel."
