Technology services firm NCS is expanding its Asia Pacific footprint through a joint venture with Globe Telecom in the Philippines. NCS has agreed with Globe to acquire a majority stake in Globe’s IT arm, Yondu, enabling its global clients to have greater access to digital, cloud, data and AI services.
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 NCS CEO Ng Kuo Pin.
“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.,” he added. “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.”
According to IDC, the APAC IT services market is forecast to grow at a compound annual growth rate of 6.2% from 2024 to 2028, and the Philippines at 8.7% in the same period.
“Information technology is the bedrock on which industries are built on,” said Globe President and CEO Ernest L Cu. “Information Technology enables, and changes our question from ‘how do we use this’ into ‘what other good things can we do with this?”
“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.”
As part of the transaction, NCS, through its wholly owned subsidiary NCSI Holdings, will acquire a 51% stake in Yondu, which will have a post-transaction enterprise value of SGD44 million, for a total net consideration of approximately SGD3 million, subject to net cash and debt adjustments pursuant to the joint venture agreement. The consideration paid by NCS is net of the circa SGD19 million used by Yondu to acquire the existing NCS’ subsidiary, NCSI Philippines.
The transaction will be funded using cash and internal resources. The closing of the transaction is subject to the satisfaction of certain conditions precedent. As of December 31, 2023, the audited net asset value of NCS’ 51% stake in Yondu is SGD14.1 million, and the audited net asset value of NCSI Philippines as of March 31, 2024, is around SGD5 million.
