Apollo Strikes $6.93 Billion Deal to Buy ADT

[Porker]

ADT Corp. agreed to be acquired by private-equity firm Apollo Global Management LLC in a deal that values the home-security company at about $6.93 billion, the latest sign market volatilityhasn’t brought deal making to a halt.

The Wall Street Journal reported Monday that the firms were in talks and that a deal could be reported as soon as Tuesday. The all-cash price tag of $42 a share represents a 56% premium over Friday’s closing price.

ADT will fold into Apollo’s Protection 1 subsidiary, an ADT competitor Apollo bought last year in a move into the alarm monitoring services industry. “Protection 1’s robust commercial presence will speed ADT’s expansion into the commercial sector,” said Timothy Whall, Chief Executive of Protection 1. Mr. Whall will lead the combined business upon the deal’s completion, expected by June.ADT, an offshoot of the former Tyco conglomerate, makes security products for residential customers and businesses, ranging from burglary alarm systems to wireless cameras and video surveillance. It has worked to position itself as a player in the so-called smart-home market, which aims to connect consumers wirelessly to various household devices. The company’s stock is down 30% in the past year, in part as a result of a broader downturn sparked by fears of slowing economic growth, among other factors.

The transaction represents one of the biggest leveraged buyouts in recent years. ADT has more than $5 billion in debt, according to S&P Global Market Intelligence, and a so-called enterprise value of close to $10 billion.Apollo, based in New York, was founded by veterans of junk-bond pioneer Drexel Burnham Lambert. The firm is known for its willingness to make aggressive, sometimes contrarian, bets. The firm has been acquisitive as of late as many rivals have sat on the sidelines of the LBO market. Just this month, Apollo signed a deal to buy struggling education company Apollo Education Group Inc.—with which it is unaffiliated—for around $1.1 billion.

The deal also signals that market volatility hasn’t derailed the merger market. Despite choppy equity, debt and other markets this year, activity so far in 2016 has been surprisingly robust in the wake of the record activity notched in 2015, when companies struck nearly $5 trillion of mergers. Other tie-ups this year include China National Chemical Corp.’s $43 billion deal for agricultural-products providerSyngenta AG and Shire PLC’s $32 billion planned purchase of BaxaltaInc.

The companies said the combined company will generate $318 million in monthly revenue and total annual sales of at least $4.2 billion. In its most recent fiscal year, ADT posted $3.57 billion in revenue, up 4.9% from the previous year.

Apollo said Tuesday that it would finance the deal through $4.7 billion in new debt and the issuance of $750 million in preferred securities.

The merger agreement includes a “go-shop” period, during which ADT may actively solicit and consider alternative proposals.

Barclays, Citigroup Global Markets, Deutsche Bank and RBC Capital Markets are serving as financial advisers to Protection 1. Goldman Sachs is serving as lead financial adviser to ADT, while BofA Merrill Lynch also is serving as financial adviser to ADT.

ADT shares jumped 53% to $41.22 in premarket trading, while Apollo’s stock slipped 4.9% to $12.75.

[Angcheek]

Waaa jump so high ... u must be huating alot keke

[Porker]

Waaa jump so high ... u must be huating alot keke

 

I'm not into security companies although on hindsight I wish I own a ton of their shares 

[The_Bear]

Cheh...I tot Apollo Nite Club