The private equity firm is paying a 56 percent premium for the maker of burglary alarms and wireless cameras. It'll then merge ADT with its Protection 1 business. Fred Katayama reports.
A marriage between rivals in the security industry. Private equity firm Apollo Global Management is buying ADT for $7 billion. That's a hefty 56 percent premium. ADT, a spinoff from conglomerate Tyco International, makes burglary alarms, wireless cameras, and video surveillance equipment for homes and businesses. Once the deal closes, Apollo will merge ADT with its alarm monitoring services business, Protection 1. It's a leveraged buyout. Apollo will tap equity and loans to do the deal. It has been busy lately. Earlier this month, it joined others to buy University of Phoenix operator Apollo Education Group for $1.1 billion. It bought community hospital operator RegionalCare Hospital Partners in November and Protection 1 in July. ADT's stock, down 30 percent over the last 12 months, skyrocketed higher but fell short of the offer price in early trading. Apollo Global Management also rising. The companies expect to close the deal in June. But ADT has the right to shop itself around for a better offer.