ST Engineering - RHB Invest 2023-12-15: Strengthening Its Cyber Capabilities; Keep BUY

ST Engineering - Strengthening Its Cyber Capabilities; Keep BUY

ST Engineering (SGX:S63) | SGinvestors.ioST Engineering (SGX:S63)
  • ST Engineering (SGX:S63) plans to acquire a 100% stake in D'Crypt for an initial consideration of S$67m, subject to conditions precedent and customary post-completion adjustments.
  • We view the acquisition positively as it further strengthens ST Engineering's cyber business, which is a trusted provider of end-to-end IT and operating technology cybersecurity solutions for critical infrastructure and high-security enterprises.
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Details of the D'Crypt deal.

  • In addition to the initial consideration, the deal also includes an earn-out consideration of S$5m conditional upon meeting the stipulated earn-out milestone. Based on the unaudited financial statements of D’Crypt for the half year ended 30 Jun 2023, the book value and NTA of D’Crypt stood at ~S$48.1m and S$46.1m.
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  • ST Engineering expects to incur transaction expenses of ~S$0.6m (~1% of enterprise value), which will be fully incurred in 2023. There will also be integration expenses of ~S$2.7m, which will be incurred over three years.
  • ST Engineering expects to complete the transaction in the first quarter of 2024.

Enhances capabilities.

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Shekhar Jaiswal RHB Securities Research | 2023-12-15

Read also RHB's most recent report:
2024-04-08 ST Engineering - Updated ESG Data; Unchanged Positive Thesis; BUY.

Previous report by RHB:
2024-03-04 ST Engineering - Earnings Growth Momentum To Continue; BUY.

Price targets by 5 other brokers at ST Engineering Target Prices.

Listing of research reports at ST Engineering Analyst Reports.

Relevant links:
ST Engineering Share Price History,
ST Engineering Announcements,
ST Engineering Dividends & Corporate Actions,
ST Engineering News Articles


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