ST Engineering unit, SP Group to sell joint venture for S$290 million to Singapore fund manager Seraya Partners
The buyer is AQX, a Tokyo-based digital infrastructure investment platform focused on developed Asia-Pacific markets such as Singapore, Japan, Korea and Australia. It is wholly owned by home-grown private equity manager Seraya Partners.
On Thursday (Jul 17), ST Engineering and SP Group said the proposed transaction will better position SPTel to scale under a new owner.
'(It) will enable SPTel to grow under a new owner whose primary mandate is in investing and growing digital infrastructure platforms,' they said.
The sale consideration is S$290 million, subject to closing adjustments.
This translates to an enterprise value-to-revenue multiple of 4.1 times and an enterprise value to earnings before interest, taxes, depreciation and amortisation (Ebitda) multiple of 21.4 times, based on SPTel's revenue and Ebitda for the year ended December 2024.
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SPTel is 51 per cent owned by ST Engineering Urban Solutions and 49 per cent owned by SP Group.
The proposed sale is expected to yield a one-off gain of around S$80 million for ST Engineering based on its carrying value for SPTel of around S$65 million. Besides this, it is not expected to have material impact on ST Engineering's consolidated net tangible assets per share and earnings per share for the current financial year.
Additionally, the sellers may receive an earn-out amount of up to S$15 million if certain buyer's return thresholds are met in the future, ST Engineering and SP Group said.
For the financial year ended December 2024, SPTel posted S$72 million in revenue and a S$4 million net loss. Its revenue is not consolidated into the financials of both joint venture owners as it is equity accounted.
The sale consideration and earn-out amount were arrived at on a willing-seller, willing-buyer basis, taking into account the business track record, prospects of SPTel and its financial performance among other factors, the companies said.
The proposed transaction is expected to close in Q4 2025, subject to conditions including approval from the Infocomm Media Development Authority.
None of the directors or controlling shareholders of ST Engineering have any interest in the proposed transaction.
Seraya Partners is a Singapore-headquartered private equity manager that focuses on Asian mid-market deals in the energy transition and digital infrastructure sectors.
ST Engineering Urban Solutions acquired a 51 per cent stake in SPTel in May 2017, prior to which it was wholly owned by SP Group since 1997.
Shares of ST Engineering ended Wednesday 0.1 per cent or S$0.01 higher at S$8.34.
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