As a means to expand in cyber security, Singapore Telecommunications Ltd. will soon buy 98% stake in Trustwave Holdings Inc. for an amount of $810 million, the companies announced on Tuesday.
SingTel, a large operator based in Singapore owns stakes in mobile companies based in Indonesia, the Philippines, Thailand, Bangladesh, India, Sri Lanka and countries in Africa. SingTel runs Optus, one of the major operator in Australia.
While, Chicago-based TrustWave specializes in managed security services, an upcoming popular option for businesses, The company allows its clients to hand over their network security, vulnerability management and data breach responsibilities to a third-party, so they do not have to stress themselves to develop the capabilities in-house. With new technologies cyber security has become very complicated but at the same time managed security services are mostly cheaper and allow companies to take quick action to security breaches.
Apart from the 98% of the equity of Trustwave, the balance would remain with Robert.J.McCullen, the chairman and chief executive of the Chicago firm. The deal would give the company authority over businesses in North America, Europe and the Asia-Pacific region and is expected to bring revenue from the third year, said SingTel in a statement to the Singapore Exchange Wednesday. According to data by Bloomberg, this will be the biggest of the Singapore-based company’s acquisition after the Australia’s Optus takeover in 2011 for $9.69 billion.
Currently, SingTel is on a lookout to expand in new areas as there is a slump in its growth in the home market and the company depends more on the dividends from investments in emerging-market carriers including India’s Bharati Airtel Ltd. In 2012, to add mobile advertising, the company acquired Amobee Inc and in 2014, Adconian and Kontera Technologies Inc, digital marketing and content companies.
Through this recent acquisition, “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,” said Chua Sock Koong, SingTel’s Group chief executive. Also through this, the comapny will expand the firm’s existing portfolio of cloud-based solutions and help grow its managed services business.
Despite of the acquisition, TrustWave will operate as a standalone business unit, and its CEO and president, Robert McCullen will retain their positions. It will continue operating as its own brand and provide the same services, he wrote to his customers. It has more than 3 million business subscribers, served by 1,200 employees in 26 countries. It also runs security operation centers in Chicago, Denver, Minneapolis, Manila and Warsaw.
The deal is expected to close in three to six months pending regulatory approvals.