Singtel Finally Managed To Divest Cash Burning Cybersecurity Division For US$205Mil.

Singtel has finally found a buyer for its cash burning Cybersecurity business of Trustwave. It has agreed to sell Trustwave to MC2 Titanium (growth equity fund of the advisory firm The Cherloff Group) for US$205Mil. Singtel had purchased Trustwave for an astounding US$770Mil in April 2015. This is now half a billion dollar losses in terms of investment capital. If we take into account the losses retained since 2015 M&A, Trustwave has burnt a big hole in the treasury chest of Singtel ever since the acquisition. 

Back in 2015, while I was still working in Singtel Group, I could still vividly recall this much talk about "strategic acquisition" of this new business which is supposed to catapult Singtel to become a global player in Cyber Security.  This is meant to expand Singtel’s existing portfolio of cloud based solutions and further entrench its leadership position in the managed services market. Singtel will leverage Trustwave’s threat intelligence, technology and talent to meet the growing demand for always-on managed security services in North America and the Asia Pacific region. However, no one knew that this venture was destined for failure and became a white elephant. 

Parting thoughts

I am pleasantly surprised that some industry player is willing to part US$205Mil to buy this piece of cash burning business and attempt to turn it around. With this disposal, the balance sheet of Singtel will become even stronger. 

Anyway, I am looking forward to Singtel latest re-organisation where it has crafted out its local and regional data centre businesses  as a standalone infrastructure unit. Singtel seems well positioned to unlock latent values in this new engine of growth.