Mergers and Acquisitions Activity: An ASEAN Rundown

Mergers and Acquisitions activity in ASEAN, though increasing, is still relatively low in comparison to Australia’s M&A activity. The Australian channel has an average rate of one deal every four days. Specifically, for the start of 2019 – that is from 1 January until 12 February, a total of 12 agreements have been signed for 42 days, equating to activity every 3.5 days or a mere 84 hours.

Mergers and acquisitions activity in the ASEAN channel is increasing this 2019 due to the need to build out specialised capabilities. To date, there have been more than 10 channel-related deals at a regional level. This is apart from the 25 industry-related transactions across the world.

The two major reasons why local partners have gone to market are the need to find an expert across cloud and software solutions and the need to obtain security and data centre capabilities. The M&A are showing patterns within the local ecosystem as partners chase new markets, customers and technologies.

Here are some of the noteworthy ASEAN mergers and acquisitions activity in the first half of 2019.

Game-changing M&As

US$125 million deal of 8X8 acquiring Singapore-based Wavecell

In the M&A that included cash and stock, 8×8 has entered into the communications platform-as-a-service (CPaaS). The acquisition is designed to enhance the vendor’s offerings within the service delivery space, alongside APIs for SMS, chat apps, voice, and video.

NTT Communications, Dimension Data, and NTT Security joining forces

Early in July 2019, NTT has officially launched its $11 billion business comprising of NTT Communications, Dimension Data, and NTT Security. The global tech giant spearheaded by Jason Goodall employs around 40,000 staff in offices across more than 70 countries and regions. This M&A has a huge industry impact with NTT housing the capabilities of 28 companies.

As confirmed by Channel Asia, John Lombard has been named as CEO of Asia Pacific and is responsible for NTT’s global business in the Asia Pacific, excluding Japan and Australia.

Cloud and Software M&As

Cloud Comrade, Synchrony Global, and RightCloud in Singapore, alongside ISS Consulting in Thailand, Plaut IT in Malaysia and Ebiz Cipta Solusi in Indonesia are some of the mergers and acquisitions activity in the cloud and software space.

Rizing and Synchrony Global. In January 2019 Rizing, LLC, a privately-held multinational company providing leading SAP functional and technical services, completed its acquisition of Synchrony Global, a market leader in the Asia Pacific with a focus on SAP SuccessFactors Certified Professionals as well as a strong Business Process Outsourcing service headquartered in Singapore. This acquisition strengthens Rizing’s global position in the SAP SuccessFactors Cloud Software services market.

ST Telemedia and Cloud Comrade. ST Telemedia, an active investor in the Communications, Media, and Technology (CMT) space, acquired cloud start-up Cloud Comrade in January this year. The acquisition leverages the provider’s specialist expertise to bolster multi-cloud and digital capabilities.

EY and Plaut IT. Before January 2019 ended, EY has acquired Plaut IT, an SAP consulting and technical services provider, along with its local subsidiary EchoJunction and Malaysian subsidiary, Baseliner. This added 130 people to EY’s technology services and marked the global professional services firm’s third “digital” acquisition within seven months, including the acquisition of Adelphi Digital Consulting Group in November 2018.

SoftwareOne and RightCloud. In February, SoftwareOne acquired Singapore-based cloud service provider, RightCloud, for an undisclosed amount, further expanding its operations around the Asia Pacific promoting its multi-cloud strategy, and offering a range of services including managed services, cloud security, big data, business analytics, DevOps, application development and SAP on Cloud.

Information Services International-Dentsu (ISID) and Ebiz Cipta Solusi. In April 2019, Japan-based Information Services International-Dentsu (ISID) took a 75 % equity stake in Ebiz Cipta Solusi, an Indonesian independent software vendor.

itelligence AG and ISS Consulting. In July, Bangkok-based ISS Consulting, one of the leading SAP consulting firms across the country, focusing on manufacturing, automotive, retail, and food and beverage industry sectors, was acquired by intelligence AG, a global SAP specialist.

Data Centre M&As

In the recent 6 months, four key mergers and acquisitions activity have transpired in the data centre space.

Iron Mountain and IntoZafe. In June 2019, Iron Mountain announced its plans to acquire Bangkok-based InfoZafe, providing the US-based storage vendor with additional reach across Thailand and expanding the company’s presence and capacity for service delivery, while providing an additional facility in Bangkok.

ST Telemedia Global Data Centres (STT GDC) and Tata Communications. Also in June, ST Telemedia Global Data Centres (STT GDC) has acquired the remaining 26 % stake of Tata Communications in STT Tai Seng, making STT GDC the 100 % owner of the Singapore facility. The agreement came two years after STT GDC entered into a strategic partnership with Tata’s data centre business in Singapore and India, holding a 74% majority stake across both markets.

Princeton Digital Group (PDG) and XL Axiata. Princeton Digital Group (PDG) took a 70 % stake in XL Axiata’s data centre portfolio in Indonesia, enabling Singapore-based PDG to establish a “strategic presence” in Indonesia, which is poised to become the largest digital economy in Southeast Asia by 2025. XL Axiata owns five data centres across Indonesia.

ChinData and Bridge Data Centres. Bain Capital-owned business ChinData and Bridge Data Centres create a “pan-Asian” data centre platform in the region through its merger.

ChinData Group, the New parent company, will continue to operate under the ChinData and Bridge brands respectively and provide hyperscale, wholesale and custom-build data centre solutions to regional and global customers, with facilities in China, India and Southeast Asia.

Notable M&As

DXC Technology and Sime Darby Berhad. In May 2019, DXC Technology, the world’s leading independent, end-to-end IT services and solutions company has acquired the global services centre of Sime Darby Berhad in Malaysia, backed by a long-term managed services agreement. This brings the tech giant control over Sime Darby Global Services Centre (SDGSC), the in-house provider of its HR, finance, accounting, and IT services.

Future Data and Maximus Group Consulting. Future Data acquired a majority stake of 64.86% in Maximus Group Consulting in June, a Hong Kong-based cybersecurity consulting firm, as part of in-market growth plans. It comprises of 24,000 sale shares and the subscription of 24,000 new shares.

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