Singapore Technologies Engineering (ST Engineering) has announced that its subsidiary Singapore Technologies Engineering (Europe) Ltd has entered into a conditional share purchase agreement to acquire Belgium-based satellite communications firm Newtec Group at US $281 million. The acquisition is expected to be completed in the second half of 2019.
The consideration of $281-million is on a cash-free and debt-free basis for the proposed acquisition, subject to closing adjustments, is payable in cash.
Newtec was among the first companies to successfully test over-the-air communication via LEO satellites. LEO satellites are expected to take off with the launch of more than 5,000 satellites in the coming years. The company is also well placed to leverage the advent of IP-based satellite broadcast which is critical for real-time content distribution.
The proposed acquisition of Newtec will add intellectual property, products and market access. ST Engineering will continue to invest in Newtec in Belgium to position it to be the Group’s European centre for the satcom business. The complementary and synergistic effect of this proposed acquisition will enable ST Engineering to meet demand across the full spectrum of the satcom market.
With enhanced satcom capabilities, ST Engineering can better participate and lead the advancement of the satcom industry to enable Smart Cities globally. Capitalising on an enlarged IP and product portfolio, the Group will be able to accelerate the deployment of satcom-enabled 5G telco network, bringing high bandwidth connectivity to remote regions.
It will be able to address the growing needs for IoT and M2M connectivity, where millions of devices and telematic sensor points are expected to be connected for surveillance, data gathering and big data analytics. The merger will also help it provide end-to-end solutions for the mobility segment, enabling seamless internet connectivity and remote monitoring for the aeronautical, maritime and connected car segments.
“This proposed acquisition expands our satcom business in a meaningful way in an attractive industry that is high-tech and high-growth, driving connectivity advances in a world where 5G and satcom converge,” said Vincent Chong, President & CEO, ST Engineering. “It aligns with our strategy to invest in businesses that help accelerate our growth trajectory, especially in Smart City, to deliver long-term shareholder value.”
“We are pleased to be able to acquire Newtec, an established satcom player with strong technology foundations. The differentiated yet complementary technologies, combined with our track record and established satcom experience, will enable us to innovate and deliver more value-added, advanced satellite products and capabilities to our customers, at a more rapid pace,” said Ravinder Singh, President, Electronics sector, ST Engineering.
Roald Borré, Chairman of Newtec Board of Directors added: “This coming together of two companies will enable us to move forward together, using our deep-rooted passion for innovation to address our rapidly changing world of connectivity.”
Satcom is a fast-growing industry with an expected CAGR of 8% over the next 10 years. ST Engineering has been growing its satcom business through its U.S.-based iDirect and Singapore-based satcom product and solution business. The Group’s satcom business is a major player in the Aeronautical and Maritime segments and has led the industry’s transition to high-throughput satellite (HTS) managed services. It is also the technology provider for leading global satellite operators such as Inmarsat, Intelsat and SES.