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Singtel’s Strategic Reset: Trustwave Sold for $205 Million

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Continuing with its strategic business overhaul, Singtel has declared that it is parting ways with its cybersecurity subsidiary, Trustwave, selling it off to MC2 Titanium for a sum of $205 million. While this move was foreseen, given that the business was up for sale for quite some time, the transaction could have been announced earlier.

The Singapore-based telecommunication giant heralded a strategic review of Trustwave last year amidst a struggling fiscal performance that necessitated write-offs at the said unit. It drew a slew of conjectures about the subsidiary’s future, culminating in Bloomberg’s report on Singtel’s consultation with financial counselors to aid in a potential sale.

Bloomberg prognosticated a range of $200 million to $300 million from the sale, which is rather less than the amount Singtel invested in Trustwave less than ten years ago, understandably because of the write-off. However, Singtel concluded the deal at the lowest end of the speculated range, which may not be an ideal financial scenario. Singtel had assigned Trustwave a worth of $850 million in mid-2015, and the final settlement had seen it pay $810 million for a 98% equity interest.

The final sale figure, which is just about a quarter of the initial investment, clearly reveals that this was a prudent decision from Singtel. It purportedly took Singtel until the previous week to wrap up its strategic review of Trustwave, says its investor presentation on the subject.

The sale is in congruence with “Singtel’s strategic reset to refocus its business in Asia Pacific & improve shareholder value by optimizing resource allocation.” In layman terms, Singtel is selling off assets to generate capital and primarily channelizing its focus onto 5G and other ICT and digital services. This policy saw it dispense with a host of tower assets and Amobee, and last month, it sold a 20% stake in Singtel Digital InfraCo to KKR for $800 million.

Singtel has kept mute on the Trustwave deal so far, however, it’s apparent that it’s doing its best to recover from a venture that didn’t bear the expected fruit. Singtel predicts that the sale would not noticeably affect its group numbers for financial year 2024 and expects the transaction to be wrapped up by the end of this fiscal year, post customary regulatory sanctions.

Fingers crossed; if everything goes as per the plan, Singtel would be successfully closing another chapter in its bid to recalibrate its focus. The true measure of this approach will be revealed in the upcoming fiscal numbers.

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