ADT (ADT) to be Acquired by Apollo Funds in $15B Deal

Shares of The ADT Corporation (ADT) were up +14.13 or +52.59 percent to $41.00 per share in Tuesday’s premarket after news broke early this morning that the company would be taken over by Apollo Global Management (APO) for $42 per share. ADT Corp. stock closed at $26.87 per share, up +0.50 or +1.90 percent in Friday’s regular trading session.

Boca Raton, Florida based ADT Corp. was founded as American District Telegraph in 1874.
The company began as a security company after the formation of the Gold and Stock Telegraph Company in 1863 with the invention of the stock ticker by Edward A. Calahan. Three years later, the president of Gold and Stock Telegraph was awakened by a burglar inside his home, which was the inspiration for a telegraph based alarm system. The company has since grown significantly to include fire and burglary detection, as well as carbon monoxide detection, video surveillance and radio frequency identification to name only a few. The company was bought by Tyco in 1997 through a reverse takeover. In 2011, Tyco decided to split into three companies with ADT being one of them. The company is a component of the S&P 500.

ADT Corp. will be combined with a previous Apollo acquisition, Protection 1, a full service home and business security firm. The combined company will be headed by Tim Whall, Chief Executive of Protection 1.

The transaction will be financed by $1.555B in new first lien term loans, the issuance of $750 million of preferred stock in Koch Equity Development LLC, Koch Industries investment and acquisition arm and $3.140 billion in new second tier loans. Concurrent with the closing of the transaction, Protection 1 will enter into a new $255 million first lien revolving facility which will increase the company’s combined senior secured revolving facility to $350 million.

In addition, Protection 1 intends to redeem all of ADT’s 2.25 percent outstanding unsecured notes due in July of 2017 and the company’s senior unsecured 4.125 percent notes due in April of 2019 along with all outstanding borrowings in its revolving credit facilities. Protection 1 will also guarantee ADT’s remaining $3.75 billion of total senior unsecured notes.

Naren Gursahaney, President and Chief Executive Officer of ADT said in the company’s press release that, “This transaction represents a highly attractive premium for ADT's shareholders. We're proud to have strengthened the quality of our customer base, improved service and retention, and extended our leadership in innovative solutions such as our ADT Pulse platform and our new Security-as-a-Service offering, ADT Canopy. By combining Protection 1 with ADT, we will be better positioned to expand the breadth and depth of the services we offer to our customers throughout the United States and Canada.”

ADT’s Board of Directors unanimously approved the transaction, which is expected to be concluded by June of this year. The transaction is still subject to ADT stockholder approval and the applicable antitrust waiting period in the United States and Canada.

The deal includes a “go shop” period that will allow ADT and its Board to actively solicit negotiations with other parties that may offer alternative proposals during a period of 40 days following the execution of the definitive agreement.

News about ADT

ADT Stock Surges on Earnings Beat

Company earned $0.49 per share in its first quarter versus $0.46 expected.

The ADT Corporation Announces Quarterly Dividend

Board of Directors announces a $0.22 cash dividend payable on February 17th to stockholders of record on January 29th.

Other Stocks in the News

Solar Frontier Sells Solar Farm to Southern, Turner Renewable

Plant in Imperial County California has a 20 year power purchase agreement with San Diego Gas & Electric Co.

Daimler to lay off more than 1,200 in N. Carolina

Daimler cited falling demand for commercial trucks the reason for the layoffs.

Published on Feb 16, 2016
By Jay Hawk
Jay Hawk
Jay Hawk enjoyed a 12-year professional financial markets career incorporating extensive first hand futures and options experience obtained by trading in the stock, commodity and forex markets on U.S. exchanges. Since retiring as a full-time financial market professional, he has been actively trading stock, commodities, forex and options for his own account and managing funds for others, as well as writing financial market commentary and educational articles.

Copyrighted 2016. Content published with author's permission.

Posted in ...