Apollo Global Management; market cap as of 19/02/2016: $2.70bn
ADT Corporation; market cap as of 19/02/2016: $6.59bn
Introduction
US private equity firm Apollo Global Management has agreed to buy ADT, an American home-security company, paying c.$11bn for a total enterprise value in the so far biggest leverage buyout of this year. Apollo aims to merge ADT with its subsidiary Protection 1, a small security player the private equity firm bought last year in a move into the alarm monitoring services industry.
About Apollo Global Management
Apollo Global Management (NYSE: APO) is a New-York based private equity firm specialized in leveraged buyouts and purchases of distressed assets. The company has three main business segments: the Private Equity business, which had $38bn of assets under management as of September 2015, the Credit business which invests mainly in Structured Credit, Opportunistic Credit, Non-Performing Loans and the Real Estate segment which focuses mainly on acquisition and recapitalization of real estate portfolios, platforms and operating companies and distressed for control situations.
With its Private Equity managed funds Apollo invests mainly in industrial, media, leisure, distribution, consumer and services companies. Among the most notable companies in its portfolio are Core Media Group (American Idol), the gaming company Harrah’s Entertainment and McGraw-Hill Education unit.
About ADT Corporation
The Florida based ADT Corporation (NYSE:ADT) is the largest security business in the US, providing electronic security, automation, monitoring services, video surveillance systems and fire protection for homes and businesses. With a 6.5m customer base, ADT boasts a market share of 25% for the residential market and 13% for the small business market in the US.
Having a long history of M&A, the company’s management was prone to the buyout crafted by Apollo.
In 1997 the company was acquired by Tyco International, in 2010 ADT acquired its competitor Broadview Security while in 2011 Tyco decided to split its company in three different businesses, with ADT ending up being one of the three. Despite ADT’s recent loss of its M&A head, the company’s most recent sizeable acquisition was last year’s purchase of Reliance Protection, a monitored security services provider based in Canada, in a $500m deal.
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