APOLLO Global Management says it will acquire security monitoring company ADT Corp. for about $US6.9 billion. It’s the biggest leveraged buyout of the year, according to Bloomberg Business.
Apollo will pay $42 a share in cash for the Boca Raton, Florida-based company, 56 per cent above the Friday closing price. Apollo plans to combine ADT with Protection 1.
According to Shlomo Rosenbaum of Stifel Nicolaus & Co, “ADT gains a partner that has done a better job at retaining customers and signing up new ones because it doesn’t need to focus on quarterly earnings.
“When you’re private you can basically say, ‘This makes a lot more sense on a long-term perspective,” he said in an interview. “They’re starting to bring the attrition rates down, which is the first thing that’s necessary to do. When you’re a public stock you end up getting punished for what are the initial turns on that because the numbers don’t look as good.”
ADT’s share price jumped 48 per cent to $39.64 at the close in New York – its biggest one-day gain since going public.♦