BT to buy Singapore's Frontline

SINGAPORE (Reuters) - Telecoms giant BT Group BT.L said on Wednesday it agreed to buy Singapore IT firm Frontline Technologies FRLT.SI for S$202 million (67.95 million pounds), as it seeks to boost its presence in Asia.

The BT logo is seen in an undated file photo. BT will buy Singapore computer services firm Frontline Technologies for S$202 million (67.95 million pounds), the Singapore firm said on Wednesday. REUTERS/VisMedia

BT has sizeable operations in Japan, South Korea and Australia, but buying Frontline will give it greater exposure to China, India, Taiwan and Southeast Asia as it looks to transform itself into a global IT services provider.

“Nothing is enough -- it’s a good step,” BT Asia Pacific President Allen Ma told Reuters, when asked about future acquisitions in the region.

BT will pay S$0.245 for each Frontline share, a 17 percent premium to Frontline's price on Monday before its shares were suspended. Frontline resumed trade on Wednesday, jumping 11.9 percent, against a 0.9 percent gain on the main index .STI.

BT shares were up 0.8 percent, underperforming a 1.2 percent gain on the FTSE 100 index .FTSE.

As part of the deal with BT, Frontline will buy an additional 9 percent of India's Accel Frontline ACFL.BO to raise its stake in the Indian firm to 51 percent. Accel shares jumped 10.2 percent in Mumbai.

The purchase of Accel shares is conditional on BT acquiring 100 percent of Frontline, Ma said.

Frontline said its founder and executive chairman Steve Ting along with other shareholders, who together hold 41 percent of Frontline shares, will vote for the proposed takeover.

Frontline, which has 5,000 staff delivering complex solutions and network management services, had net profit of S$9.55 million and sales of S$200.5 million in the year to end-March.

BT is moving away from its origins as a fixed-line operator, and this week completed its purchase of the critical infrastructures division of France’s CS Communication & Systems for 60 million euros (43.3 million pounds).

Macquarie Securities (Asia) is BT’s financial adviser for the deal. Frontline was advised by PrimePartners Corporate Finance.

According to Dealogic, there have been 246 deals involving computer services firms in Asia this year, worth $2.8 billion (1.37 billion pounds).

Additional reporting by Chua Baizhen and Melanie Lee, editing by Neil Chatterjee and Ian Geoghegan