SINGAPORE – ST Engineering will acquire cryptographic technology company D’Crypt from an indirect subsidiary of StarHub, both parties said separately on Dec 13.
The transaction, which is cash-free and debt-free, comprises an initial consideration of $67.5 million, subject to certain adjustments, and a $5 million earn-out consideration, conditional upon meeting a stipulated earn-out milestone.
The move aligns with ST Engineering’s strategy to grow its cyber business, which provides end-to-end information technology and operational technology cyber-security solutions for critical infrastructure and high-security enterprises.
The divestment will allow StarHub to optimise its resources on other businesses that will elevate the execution of its 3C (cloud, cyber security and connectivity) strategy.
Its cyber-security business, in particular, will focus on developing platform-based offerings.
D’Crypt, which operates profitably at the entity level, specialises in cryptographic tech design.
It also offers solutions in encrypted communications, single-chip crypto tokens, secure computing and high-performance computing.
ST Engineering expects the proposed acquisition to be cash flow-positive from the first year and earnings accretive by the second year post-completion.
This is after factoring in financing costs, transaction and integration expenses, and amortisation of intangibles.
The counters of ST Engineering and StarHub closed flat on Dec 13, at $3.77 and $1.10 respectively. THE BUSINESS TIMES
