SINGAPORE (THE BUSINESS TIMES) - NCS, Singtel's technology services arm, announced it would acquire Australian IT services company The Dialog Group for A$325 million (S$329 million) as it looks to further its plans to be a pan-Asian business-to-business digital services provider.
The acquisition is expected to be completed in three months, subject to the approval of regulators and other third parties.
In an interview with The Business Times, NCS chief executive Ng Kuo Pin said the move would help the information and communications technology subsidiary gain a foothold in Australia very quickly, as opposed to if the company had to grow its operations there from scratch.
Dialog is Australia's largest privately owned IT services company and has about 1,000 IT consultants spread across offices in cities such as Canberra, Melbourne, Perth and Sydney. Notable clients of the group include Australian telco Telstra and the New South Wales Electoral Commission.
"We think that this is a very good foundation for us to build on in order to capture the growth that we're starting to see in the Australian marketplace," said Mr Ng. He noted that according to research firm Gartner, IT spending in Australia will grow by 6.5 per cent this year.
He also pointed out that NCS has grown in the last two years, with NCS NEXT to provide digital, cloud and platform services on top of its existing application and infrastructure solutions to customers. Likewise, NCS will integrate Dialog's existing solutions with NCS NEXT to provide its clients with end-to-end solutions.
Additionally, he said the acquisition will help to grow the company's talent pool at a time when tech talent is difficult to come by. NCS currently has about 10,000 staff members.
"The No. 1 inhibitor to digitalisation is the lack of talent, whether it's in Singapore, Australia or across the Asia-Pacific," Mr Ng said, noting that with the scale of Dialog, NCS will be able to attract more talent from the Australian market too.
There are also plans to facilitate the personal growth of its consultants and cross-pollinate ideas between its different talents as Dialog joins NCS, he added.
The acquisition comes after NCS' rebranding and strategic transformation announced in July last year.
Since then, the company has acquired Riley, a cloud consultancy with Google cloud application expertise, and Eighty20 Solutions, a cloud transformation specialist with capabilities across Microsoft cloud platforms, in 2021.
In Singtel's latest business update for the nine months ended Dec 31, 2021, NCS revenue grew 8.3 per cent to S$1.63 billion year-on-year, while earnings before interest, taxes, depreciation and amortisation (Ebitda) fell 18.8 per cent to $219 million. The group attributed the decline in Ebitda to increased hiring at NCS to support its pivot towards digital services.
Singtel shares traded up one cent, or 0.4 per cent, to $2.52 on Monday before the midday break.