Here’s what analysts have to say about Singtel’s costly Trustwave acquisition

Earnings will be sacrificed in the name of stronger market position.

Analysts believe that Singtel’s $1.15b (US$810m) acquisition of US-based cyber security firm Trustwave will strengthen its market position but will impact earnings in the near term.

“The acquisition will be EPS dilutive. It is a necessary buy as many of Singtel’s customers are global MNCs wanting a single provider that is accountable for all their security protection needs worldwide. This would not be possible if Singtel were to just form partnerships,” said Maybank Kim Eng analyst Gregory Yap.

Yap also warned that there may be more dilutive acquisitions ahead as the Trustwave acquisition is not part of th $2b budget that Singtel has earmarked for digital investments.

Meanwhile, DBS analyst Sachin Mittal noted that the business has exciting growth potential but received mixed reviews from tech research companies.

“The market is very fragmented with each player having single-digit market share. Trustwave (1.6% revenue share globally) has received favourable reviews from Forrester and IDC but lags in the Gartner’s Magic Quadrant due to its niche offerings and weak execution. We hope Singtel can give Trustwave a headstart in Asia and provide financial support to grow its US and European businesses,” Mittal stated.

S&P analysts Mehul Sukkawala and Paul Draffin believe that the Trustwave acquisition is distinct from Singtel's strategy of pursuing investment opportunities in the digital life segment

“We expect the acquisition to strengthen Singtel's market position in the information security business but not materially change our view of the company's competitive position. We believe Singtel will remain disciplined in its acquisition strategy, given its limited financial headroom and the high valuations of digital companies,” they noted.

The people you want to reach are already in this room.

Every quarter, SBR lands on the desks of the founders, CFOs, and directors running Asia's most consequential companies. Every day, they open our newsletter and read our website. It's a room that took twenty years to build — and it's the one most of our partners are trying to get into.

The good news is that the door is open. We work with companies on thought leadership articles, sponsored content, industry summits across Southeast Asia, regional awards programmes, podcasts, and media placements in print and digital. The shape of the right partnership depends on what you're trying to do, which is why we'd rather start with a conversation than send a rate card.

If you have something this room should know about, tell us. We'll tell you honestly whether we can help, and how.

No rate cards until we understand the brief. It's a better use of everyone's time.

Book a meeting

| Or download the media kit (PDF)

240,000 senior readers quarterly in print Top 1,700 Singapore companies reached

7 markets across Southeast Asia