Satellite telecommunications provider Speedcast International Limited (ASX:SDA) has entered into an agreement to acquire Singapore based ST Teleport. The transaction marks the fifth acquisition of Speedcast in 2015.
ST Teleport will be acquired for a total consideration of SGD$18.5m with an expected completion date in Q12016. The Company posted revenue of SGD$19m during FY15 and Speedcast targets cost synergies on both bandwidth and operating costs. The acquisition is funded from available cash via existing debt facilities.
ST Teleport was established in 1994 and is one of the leading provider of satellite services in Singapore focusing on maritime, energy and media verticals. The Company uses diverse networks of satellite systems and terrestrial infrastructures to connect businesses. St Teleports satellite infrastructure provides access to more than 22 satellites with a direction connection between Asia and the US.
Speedacast believes that the acquisition will open the door to further expand into the Asia-Pacific region as Singapore is known to be a strategic hub for communication services. Speedcast eyes global expansion by strengthening its Asian network.
Some of the benefits of the acquisition of ST Teleport include the offshore certified engineering team, a customer support center as well as locating equipment in Singapore.
Chief Executive Officer of Speedcast, Pierre-Jean Beylier said: “Our customers will be able to leverage an impressive infrastructure and about 50 communications and IT experts to meet their business needs. ST Teleport represented a significant opportunity as it is one of only two major teleport infrastructures in Singapore, at the heart of our core Asian maritime and energy markets.”
Mr Beylier emphasises that the acquisition is “very complementary to both parties”.
Speedcast’s stock price has gained for than 150% year-to-date. SDA floated in August last year in a promising IPO that was rated 4.5 out of 5 points by Wise-owl analyst Tim Morris. We are attracted to the Company’s high revenue visibility, financial performance and underlying market trends.
Author: Imran Valibhoy
Nov 13, 2015
Since Joining the firm in 2006, Imran has worked on a range of M&A and Capital Market transactions in the natural resources, mining as well as projects in the renewable energy sector. Prior to joining Wise-owl, Imran worked at Euroz Securities in Perth, aiding in the advisory and valuation of companies in the mining and industrial sectors in Australia. Imran has a Masters in Banking & Finance from City University's Class Business School in London and a Bacheloor degree in Commerce from UWA.