UPDATE: 7:00 a.m. EST — Home-security firm ADT agreed to be acquired by affiliates of private equity giant Apollo Global Management for $42 a share, the Wall Street Journal reported Tuesday. The deal was valued at $6.93 billion, and the all-cash price tag for ADT shares was a 56 percent premium over Friday's closing price.
ADT will be a part of Protection 1, an ADT competitor that Apollo acquired last year. The deal is expected to be completed by June, according to the Journal.
“Protection 1’s robust commercial presence will speed ADT’s expansion into the commercial sector,” Timothy Whall, CEO of Protection 1, said, the Journal reported.
Shares of the electronic security services provider were trading higher by over 50 percent in premarket trade Tuesday.
Private equity giant Apollo Global Management is close to acquiring home and business protection company ADT Corp., in what would be the second major merger-and-acquisition deal involving security services firms that Apollo has done in less than a year, Dow Jones reported late Monday.
BREAKING: Apollo Global Mgmt. nears acquisition deal for ADT, which has market cap of $4.4B; announcement could be made Tuesday - Dow Jones
— CNBC Now (@CNBCnow) February 16, 2016
ADT has a market cap of $4.4 billion, which could push the value of the deal north of $10 billion with debt included.
Last May, Apollo agreed to buy Protection 1 and ASG Security in a simultaneous purchase. Apollo combined the two companies under the Protection 1 brand. The new Protection 1 generates more than $500 million a year in annual revenue, an Apollo news release said last year. ADT alone brought in more than $3.5 billion and nearly $300 million in profit last year.
Wall Street Journal reporter Dana Mattioli, who broke the news (Dow Jones owns the newspaper), pointed out that ADT was once owned by Tyco International, a firm that became well known due to a 2005 scandal in which CEO Dennis Kozlowski was convicted of embezzling money from the company. ADT became an independent public company in 2012.
— Dana Mattioli (@DanaMattioli) February 16, 2016