Singtel announced this morning that its digital marketing subsidiary, Amobee, has entered into a conditional agreement to acquire a 100% stake in Turn, Inc. (Turn) at an enterprise value of US$310m.

Turn offers data and analytics solutions through a data management platform for marketers and agencies, as well as operates a demand-side platform which provides programmatic buying capabilities that automate the process of buying digital ads in real time across video, mobile and display for major brands. This acquisition will expand Amobee’s existing programmatic and data management capabilities.

The acquisition is subject to regulatory approvals and fulfillment of closing conditions, and is expected to be completed within 1HCY17.

We deem this acquisition positive for Singtel over the longer-term as building up digital capabilities is in-line with one of Singapore’s future economy strategies, especially one which we believe is in an industry with high-growth potential.

Keeping our forecasts unchanged for now, we reiterate BUY on Singtel with the same FV of S$4.27.

Source: OCBC Research - 23 Feb 2017