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.
Read more at SGinvestors.io.
Above is an excerpt from a report by RHB Securities Research. Clients of RHB may be the first to access the full PDF report @ https://www.rhbtradesmart.com/.
