ST Engineering to acquire D’Crypt from StarHub unit for at least S$67.5 million

ST ENGINEERING will acquire cryptographic technology company D’Crypt from an indirect subsidiary of StarHub , both parties said separately on Wednesday (Dec 13).

The transaction, which is cash-free and debt-free, comprises an initial consideration of S$67.5 million, subject to certain adjustments, and a S$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 IT and OT cybersecurity 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, cybersecurity and connectivity) strategy. Its cybersecurity business, in particular, will focus on developing platform-based offerings.

D’Crypt, which operates profitably at the entity level, specialises in cryptographic technology 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, as well as amortisation of intangibles.

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On Tuesday, shares of ST Engineering closed 0.8 per cent or S$0.03 higher at S$3.780, while StarHub’s counter closed 0.9 per cent or S$0.01 higher at S$1.10.