The merger agreement includes a “go-shop” period, during which ADT and its Board of Directors may actively solicit, receive, evaluate and potentially enter into negotiations with parties that offer alternative proposals ADT, a leading provider of monitored security, interactive home and business automation and related monitoring services in the United States and Canada, today announced that it has entered into a definitive agreement to be acquired by an affiliate of certain funds (the “Apollo Funds”) managed by affiliates of Apollo Global Management, LLC (NYSE:APO) (together with its consolidated subsidiaries, “Apollo”) and co-investors and merged with a subsidiary of Prime Security Services Borrower, LLC (with its subsidiaries, “Protection 1”), a leading full-service business and home security company in the United States also owned by the Apollo Funds, for $42.00 per share in cash. The purchase price represents a premium of approximately 56% over ADT’s closing share price on February 12, 2016 and, when combined with Protection 1, represents an aggregate transaction value of approximately $15 billion. The headquarters of the combined company will remain in Boca Raton, Florida, and the combined company will operate primarily under the ADT brand. Expand ADT Services And Customers With Protection 1’s Commercial Presence “This transaction represents a highly attractive premium for ADT’s shareholders,” said Naren Gursahaney, President and CEO of ADT. “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.” “The combined company will be a market leader with a powerful brand and scale resulting in an enhanced overall customer experience,” said Timothy J. Whall, President and CEO of Protection 1, who will be the CEO of the combined business following the closing of the transaction. “In addition, Protection 1’s robust commercial presence will speed ADT’s expansion into the commercial sector supported by increasing commercial sales and technical skills across a well matched national footprint.” "This transaction represents a highly attractive premium for ADT’s shareholders" says Naren Gursahaney, President and CEO of ADT “We are tremendously excited by this unique opportunity to combine two premier businesses,” said Marc Becker, Senior Partner at Apollo. “This transaction provides the opportunity to dramatically enhance our position in the large, fragmented and growing residential and business interactive electronic monitoring industry. Pro forma for the transaction, the newly created company will generate a combined $318 million in recurring monthly revenue and total annual revenue in excess of $4.2 billion, placing the businesses in a strong position to drive innovation and to capitalize on growth opportunities in the future.” Unanimous Approval From Board Of Directors The Board of Directors of ADT unanimously approved the transaction. The acquisition of ADT is expected to be completed by June 2016. The transaction is subject to the conclusion of the applicable antitrust waiting periods in the United States and Canada, ADT stockholder approval and other customary closing conditions. The merger agreement includes a “go-shop” period, during which ADT and its Board of Directors may actively solicit, receive, evaluate and potentially enter into negotiations with parties that offer alternative proposals during a 40-day period following the execution date of the definitive agreement. There can be no assurance that this process will result in a superior proposal. ADT does not intend to disclose developments about this process unless and until its Board has made a decision with respect to any potential superior proposal. Financial Details The transaction, which has fully committed financing in place, will be financed primarily through the incurrence of $1.555 billion in new first lien term loans, $3.140 billion in new second lien financing, the issuance of $750 million of preferred securities to an affiliate of Koch Equity Development LLC, the investment and acquisition subsidiary of Koch Industries, Inc., and an equity contribution of approximately $4.5 billion from funds managed by Apollo and co-investors. Protection 1 will also enter into a new $255 million first lien revolving facility concurrently with the closing of the merger, bringing the total combined senior secured revolving facility to $350 million. Protection 1 further expects that its existing $1,095 million first lien term loan and $260 million second lien term loan will remain outstanding. In addition, concurrently with the closing of the merger, Protection 1 intends to redeem all of ADT’s outstanding senior unsecured 2.250% notes due July 2017 and senior unsecured 4.125% notes due April 2019, which will be redeemed in accordance with the applicable indenture, and to repay all outstanding borrowings under ADT’s revolving credit facility. "The combined company will be a market leader with a powerful brand and scale resulting in an enhanced overall customer experience" says Timothy J. Whall, President and CEO of Protection 1 Finally, ADT’s remaining $3.750 billion of total senior unsecured notes will be guaranteed by Protection 1 and all wholly owned domestic subsidiaries of the combined company and will be secured by first priority security interests in substantially all of the assets of the issuer and the guarantors. As a result, Protection 1 expects that these notes will maintain their current ratings and remain outstanding. Financing is being provided by Barclays, Citigroup Global Markets Inc., Deutsche Bank and Royal Bank of Canada. PSP Investments Credit USA LLC is also a committed lender under this debt financing. Goldman, Sachs is serving as lead financial advisor to ADT and BofA Merrill Lynch is also serving as financial advisor to ADT. Barclays, Citigroup Global Markets Inc., Deutsche Bank, and RBC Capital Markets, LLC are serving as financial advisors to Protection 1. Simpson Thacher & Bartlett LLP is acting as legal advisor to ADT. Paul, Weiss, Rifkind, Wharton & Garrison LLP is acting as legal advisor to Protection 1 and Apollo.
The acquisition will significantly strengthens ADT's business in Canada The ADT Corporation recently announced that it has closed the previously announced acquisition of Reliance Protectron, Inc. (Protectron), from Reliance Comfort Limited Partnership, a portfolio company of investment funds managed by Alinda Capital Partners. ADT acquired Protectron for total cash consideration of CAD $555 million. "We’re delighted to have completed the acquisition of Protectron, which will accelerate our growth plan for the important Canadian market and create value for ADT shareholders,” said Naren Gursahaney, ADT's chief executive officer. “We look forward to partnering with Protectron’s talented team to provide excellent customer service and more choice for Canadians across a variety of traditional security and automation technologies." Daniel Demers, Protectron’s president and chief executive officer, added, “This combination creates a stronger company that is better able to meet the security needs of Canadian homeowners and business owners. Together, we help protect more than 800,000 Canadians with the best people, the best products and solutions, and the best customer service in the security industry.” The acquisition significantly strengthens ADT's business in Canada. Protectron is a leading provider of monitored security services in Canada and enjoys a highly satisfied customer base with greater levels of customer retention than other major players in the North American electronic security industry. The Company will continue to use the Protectron brand under ADT ownership.
Solve Access Control Challenges in the Healthcare SectorDownload
Getting the Most Value From Software Subscription AgreementsDownload
The Role of Access Control in a Safe Return to the WorkplaceDownload
Shifting Trends in Operation Centers and Control Rooms for 2021Download