HKBN expands into cybersecurity in $50m takeover of JOS

HKBN expands into cyber security in $50m takeover

23 August 2019 | Alan Burkitt-Gray

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Hong Kong Broadband Network (HKBN) has agreed to buy a local systems integrator and cyber security specialist for $50 million.

The company will buy Jardine OneSolution (JOS) and its subsidiaries, Adura Hong Kong and Adura Cyber Security, it announced today.

Billy Yeung, CEO of enterprise solutions at HKBN, said: “We have met with around 100 of our top enterprise customers to learn about their opportunities and pain points. By a mile, the most common desire was for a one-stop-shop ICT solutions partner, rather than separate IT, telecom and other vendors.”

The company said JOS, “as a leading system integrator, IT solutions provider and technology consultant in Asia, is highly complementary to HKBN business”.

HKBN, famous for offering high-bandwidth services in Hong Kong: last December it boosted its fibre download speeds to 2Gbps, for a price equivalent to US $35.50 a month.

A year ago it bought a rival fixed-line operator, WTT HK, in a deal that valued the business at $1.34 billion including debt. WTT was jointly owned by private equity firms TPG Capital Management and MBK Partners.

Today’s planned purchase is from JTH, the technology division of Jardine Matheson, one of Hong Kong’s long-established business groups.

HKBN said that JOS has over 60 years of history and over 2,000 technology professionals across Asia, of whom 1,100 are in Hong Kong.

Eric van der Hoeven, CEO of JTH, said: “Based on the recent success and growth path of JOS and Adura, we believe this is the right time for these two businesses to become part of a technology-focused organisation with strong expertise and relationships in the technology services sector.”

In a letter emailed to “friends of HKBN”, NiQ Lai, the group CEO of HKBN, said this was the fourth acquisition since the management buyout (MBO) in 2012, when he and other senior executives made major investments in the company. “Every time we do an acquisition and either issue equity and/or take on debt, we are diluting our ownership and/or putting debt ahead of our own equity holdings, which means we need to have very high conviction that the deal will be shareholder accretive. … In short, we are paying for acquisitions with our own money, rather than just playing with other people’s money.”

He said by the time JOS is complete the business will have grown fourfold since the MBO. The JOS transaction is expected to be complete in the fourth quarter of the year.