NCS expands in Asia Pacific with Globe Telecom partnership

NCS has announced an expansion of its presence in the Asia Pacific by forming a joint venture with Globe Telecom in the Philippines.

The technology services firm has agreed to acquire a majority stake in Globe's IT arm, Yondu, as part of the venture. This move aims to significantly increase NCS' workforce in the Philippines from 150 to over 1,200 employees, marking a considerable enhancement of its operational scale in the country. This joint undertaking is also expected to accelerate the expansion of NCS' Global Delivery Network, by integrating NCS' capabilities with Yondu's existing resources and expertise.

NCS will leverage its global resources in digital, cloud, data, and artificial intelligence (AI) services to strengthen the current suite of services offered by Yondu, which includes custom software development, eCommerce solutions, and cloud platforms. Following the completion of the transaction, the joint venture will operate under the new name, NCS Philippines.

Ng Kuo Pin, CEO of NCS, expressed that "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. 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."

IDC's market analysis anticipates that the IT services market in the Asia Pacific region will grow at a compound annual rate of 6.2% from 2024 to 2028, with a projection for the Philippines pegged at 8.7% over the same period.

Ernest L. Cu, President and Chief Executive of Globe, remarked on the significance of the partnership by stating, "Information Technology is the bedrock on which industries are built on. 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."

The transaction details indicate that NCS, through its subsidiary NCSI Holdings, will gain a 51% stake in Yondu. This entails an enterprise value post-transaction of PHP 1,868 million (approximately SGD $44 million). A total consideration of PHP 134 million (approximately SGD $3 million) will be paid by NCS, factoring in net cash and debt adjustments as per the agreement terms. The PHP 134 million valuation accounts for Yondu's acquisition of NCSI Philippines, which was priced at PHP 818 million (approximately SGD $19 million).

This deal is subject to certain conditions that need completion before finalisation. The audited net asset value of NCS' stake in Yondu is reported to be PHP 605 million (approximately SGD $14 million) as of 31 December 2023, while that of NCSI Philippines stands at PHP 206 million (approximately SGD $5 million) as of 31 March 2024.