Singapore Technologies Engineering and Singapore Power have agreed to sell their broadband joint venture SPTel to private equity firm Seraya Partners for an enterprise value of $290 million.
Established in 1997 by Singapore Power, SPTel saw ST Engineering acquire a 51 per cent stake in May 2017. Seraya Partners, which manages assets worth US$1.8 billion according to its website, focuses on infrastructure investments across Asia.
In a joint statement issued on 17 July, ST Engineering and SP said the transaction would allow SPTel to expand under new ownership with a primary mandate to invest in and grow digital infrastructure platforms. “With this strategic alignment, SPTel will be better placed to scale and provide a more diverse network in Singapore,” the companies stated.
ST Engineering expects to book a one-off gain of approximately $80 million from the divestment, based on SPTel’s carrying value of around $65 million. The group confirmed the deal would not have a material impact on its net tangible assets or earnings for the current financial year.
The agreed price represents an implied EV/revenue multiple of 4.1 times and EV/EBITDA multiple of 21.4 times, based on SPTel’s revenue and EBITDA for the year ended December 2024. Additionally, the sellers could receive an earn-out payment of up to $15 million if certain return thresholds for the buyer are met.
SPTel recorded revenue of $72 million and a net loss of $4 million for the year ended December 2024. The proposed transaction is anticipated to close in the fourth quarter of 2025, subject to customary regulatory approvals.
This divestment follows ST Engineering’s recent announcement to sell its US-based construction machinery unit, Leeboy, for US$290 million.
On 16 July, ST Engineering shares closed at $8.34, rising 0.12 per cent. The stock remains the top-performing component of the Straits Times Index so far this year, registering a gain of nearly 80 per cent.
-The Edge
