ADT is latest acquisition by Apollo Global
Home security firm, Protection 1 set to merge in $7B deal
Private equity firm Apollo Global Management has acquired ADT for nearly $7 billion and will merge it with another home security company, Protection 1.
Apollo, which owns Protection 1 parent Prime Security Services Borrower LLC, will pay $42 per share of ADT, a premium of nearly 56% over ADT’s closing share price Friday of $26.87. The stock rose more than 47% on news of the deal.
The combined company will retain the name ADT and remain headquartered in Boca Raton, Fla., and have annual revenue of more than $4.2 billion.
The deal comes at a time of increased competition in the home security market, which is forecast to grow globally from $31.4 billion last year to $47.5 billion in 2020, according to global research firm Markets and Markets.
In the U.S., which accounts for about 60% of the market, traditional players such as ADT and Honeywell have seen the arrival of fairly recent entrants such as AT&T, Comcast, Time Warner Cable and Verizon — and Google, which markets its own Nest Cam security camera and home networking products.
Protection 1 CEO and President Timothy Whall will be CEO of the combined business. Protection 1’s success in commercial security will help ADT’s expansion into that market, he said in a statement.
“The combined company will be a market leader with a power- ful brand and scale resulting in an enhanced overall customer experience,” Whall said.
ADT’s board approved the transaction, which is expected to be completed by June. During a 40-day “go-shop” period, ADT can look for a better deal than the one offered by Apollo.
Tyco International, which purchased ADT in 1997, spun off ADT as an independent publicly traded company in 2012.
In a deal announced last week, Apollo and other investors acquired the parent of the University of Phoenix for $1.1 billion and will take the company private.