Singtel’s technology services firm NCS has on Thursday announced that it is expanding its Asia Pacific (APAC) footprint through a joint venture with Globe Telecom in the Philippines.

NCS said in a statement that it has reached an agreement with Globe to acquire a majority stake in Globe’s information technology (IT) arm Yondu in the Philippines, enabling its global clients to have greater access to digital, cloud, data and artificial intelligence (AI) services.

As part of the transaction, NCS, through its wholly owned subsidiary NCSI Holdings, will acquire a 51 percent stake in Yondu, which will have a post-transaction enterprise value of PHP 1,868 million ($32.87 million), for a total net consideration of PHP 134 million ($2.24 million), subject to net cash and debt adjustments pursuant to the joint venture agreement.

The PHP 134 million consideration paid by NCS is net of the PHP 818 million (approximately $14.19 million) used by Yondu to acquire the existing NCS’ subsidiary, NCSI Philippines.

The transaction will be funded using cash and internal resources.

The joint venture will scale NCS’ Philippines workforce from 150 to more than 1,200 professionals, making it a major technology services player in the country.

It also expedites the expansion of NCS’ Global Delivery Network, combining NCS’ delivery capability and capacity with Yondu’s resources and skills.

In addition, NCS will bring in its global resources in digital, cloud, data and AI services to augment Yondu’s service offerings, which currently include custom software development, eCommerce solutions and cloud platforms.

The new joint venture entity will be renamed NCS Philippines following the closing of the transaction.

“This joint venture marks a significant milestone in our APAC growth journey as we continue to invest to meet the region’s growing demand for technology services, in particular, AI-led solutions,” said Ng Kuo Pin, Chief Executive Officer, NCS.

“Globe and Yondu’s deep country expertise, coupled with NCS’ technology capabilities, will increase our capacity to further drive business transformation and innovation, especially in the telecommunications sector,

“It will offer greater value to our global clients, who will benefit from our expanded Global Delivery Network as well as greater access to our digital, cloud, data and AI services,” he added.

According to IDC, the APAC IT services market is forecast to grow at a compound annual growth rate of 6.2 percent from 2024 to 2028, and the Philippines at 8.7 percent in the same period.

“IT is the bedrock on which industries are built on…Our vision for Yondu is to be a force for good through effective IT products and services. Partnering with NCS will unlock new global opportunities, enabling Yondu to expand its reach and deliver more impactful IT solutions worldwide,” said Ernest L. Cu, President and Chief Executive Officer of Globe.

The closing of the transaction is subject to the satisfaction of certain conditions precedent.

As of Dec 31, 2023, the audited net asset value of NCS’ 51 percent stake in Yondu is PHP 605 million ($10.46 million) and the audited net asset value of NCSI Philippines as of March 31, 2024 is PHP 206 million ($3.73 million).

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