"This proposed transaction will enable SPTel to grow under a new owner whose primary mandate is in investing and growing digital infrastructure platforms.
"With this strategic alignment, SPTel will be better placed to scale and to provide a more diverse network in Singapore," state ST Engineering and SP in their July 17 joint statement.
ST Engineering says the sale will result in a one-off gain of around $80 million based on its carrying value for SPTel of around $65 million.
Besides the one-off gain, ST Engineering says this deal is not expected to have any material impact on its NTA and earnings for the current financial year.
The agreed sum translates into an implied EV/revenue multiple of 4.1x and EV/EBITDA multiple of 21.4x based on SPTel’s revenue and EBITDA for the year ended Dec 2024. In addition, the sellers may receive an earn-out amount of up to $15 million if certain buyer’s return thresholds are met in the future.
In the year ended Dec 2024, SPTel reported a revenue of $72 million and a net loss of $4 million.
The proposed transaction is expected to close in the fourth quarter of 2025, subject to customary closing conditions, including the approval of the regulators.
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Just less than a month ago, ST Engineering announced plans to divest its construction machinery unit in the US, Leeboy, for US$290 million.
ST Engineering shares closed at $8.34 on July 16, up 0.12%. It is the best-performing STI stock year to date, with a gain of nearly 80%.
