Apollo Global Management LLC has agreed to acquire two security monitoring companies Protection 1 and ASG Security. No financial terms were disclosed for the transaction that is expected be completed in mid-2015. Both companies will merge and operate under the Protection 1 brand. Credit Suisse, Barclays, Deutsche Bank, Jefferies and RBC are providing the financing for the deal. Morgan Stanley and Raymond James are providing financial advice to Protection 1 while Goldman Sachs is doing likewise for ASG Security.
CHICAGO–(BUSINESS WIRE)–Protection 1, a leading full-service business and home security company in the United States, today announced it has signed definitive agreements to be acquired by funds managed by affiliates of Apollo Global Management, LLC (NYSE:APO) (together with its consolidated subsidiaries, “Apollo”). By partnering with Apollo, one of the world’s largest alternative investment managers, Protection 1 is now even better positioned to command a greater share of the $46 billion security monitoring industry through organic growth and strategic acquisitions, both of which have been core to the company’s solid growth over the past five years.
Funds managed by affiliates of Apollo also announced today the concurrent signing of definitive agreements to acquire Maryland-based ASG Security, which will be combined with Protection 1. The newly created company, which will continue to operate under the Protection 1 brand, enables Apollo to enter the security monitoring industry with a market leader generating a combined $40 million in monthly recurring revenue and total annual revenue well in excess of $500 million. Terms of the transactions, which are expected to close in mid-2015, were not disclosed.
Protection 1 and ASG Security will join forces under the leadership of Protection 1’s Chairman and Chief Executive Officer Timothy J. Whall.
“Apollo is universally respected for recognizing investment opportunities where it can take a lead position and then work collaboratively with the management teams to achieve the greatest potential for the business. With Apollo’s style of investing, as well as their access to capital, we know this relationship is a great match for Protection 1,” said Whall. “At the same time, Protection 1 is coming together with ASG Security, which immediately strengthens our market leading position and creates additional breadth and depth in our operations. ASG has a strong reputation for operational excellence and together our companies will continue to focus on the outstanding customer service for which we are both known.”
“Apollo is delighted to be partnering with Tim Whall and his team to combine two strong businesses and create the industry leading platform in both residential and commercial security monitoring,” said Marc Becker, Senior Partner at Apollo. “Protection 1 is one of the strongest companies in the industry, with a national footprint, diverse sales channels and an experienced management team with a history of delivering strong financial results while being laser-focused on customer service. We see further opportunity for growth in the industry, and with the greater scale of a combined Protection 1 with ASG, the new company is well-positioned to succeed in a business that we believe offers very compelling expansion and value-creation opportunities.”
“As Apollo enters the security space, ASG Security is excited to be a part of creating a new platform that is well-positioned to become a significant leader in the industry,” said Joe Nuccio, President and CEO of ASG Security. “ASG’s reputation, coupled with our financial and operational strength, will play an important role in the overall company expansion and value-creation opportunities.”
Financing is being provided by Credit Suisse, Barclays, Deutsche Bank, Jefferies and RBC. Paul, Weiss, Rifkind, Wharton & Garrison LLP is acting as legal adviser to Apollo; Latham & Watkins LLP is acting as legal adviser to Protection 1; and Kirkland & Ellis LLP is acting as legal adviser to ASG Security. Morgan Stanley and Raymond James are acting as financial advisors to Protection 1 and Goldman Sachs is acting as financial advisor to ASG Security.
About Protection 1
Protection 1, a leading full-service business and home security company in the U.S., provides installation, maintenance, and monitoring of single-family home security systems, business security systems and multifamily security systems. Protection 1 serves nearly 2 million customers and employs over 3,500 people in more than 70 office locations and five UL Certified monitoring centers across the country. The company has a 97.3% customer satisfaction rating and an A+ Better Business Bureau Rating. Protection 1 also offers network management services through its Network Operations Center and is the only company in the security industry to hold Cisco Cloud and Managed Services Express Partner Certification. Since 2012, the company has been recognized by leading industry publications for its commitment to its customers, the industry and the communities it serves. For more information about Protection 1, please visit protection1.com. For other Protection 1 news, visit P1newsroom.com.
About ASG Security
Headquartered in Beltsville, MD, ASG Security is a super-regional electronic security and monitoring company with full service operations throughout the Eastern and Southwestern United States. Recognized as the 10th largest U.S. electronic security company, ASG designs, installs, monitors and services security systems for the commercial/industrial, government and residential market sectors. The company provides a full array of traditional and IP-based solutions including video surveillance, access control, monitored fire and intrusion alarm systems to more than 214,000 customers. ASG employs over 1,200 people across 24 branch offices and operates four UL / CSAA Five Diamond Certified monitoring centers. For more information, visit www.asgsecurity.com.
Apollo is a leading global alternative investment manager with offices in New York, Los Angeles, Houston, Chicago, Bethesda, Toronto, London, Frankfurt, Madrid, Luxembourg, Mumbai, Delhi, Singapore, Hong Kong and Shanghai. Apollo had assets under management of approximately $163 billion as of March 31, 2015 in private equity, credit and real estate funds invested across a core group of nine industries where Apollo has considerable knowledge and resources. For more information about Apollo, please visit www.agm.com.