(Reuters) — Electronic security services provider ADT Corp (ADT.N) said it had agreed to be acquired by funds affiliated with private equity firm Apollo Global Management LLC (APO.N) for $7 billion.
ADT shares rose 52 percent to $40.88 in premarket trading on Tuesday, just shy of the cash offer price of $42.
After the transaction closes, Apollo will merge ADT with its home security company Protection 1 in a deal valued at about $15 billion. [nGNXMMIQMa]
The offer price represents a premium of about 56 percent to ADT’s Friday close.
The combined company, to be headquartered in Boca Raton in Florida, will have proforma annual revenue of more than $4.2 billion. Apollo acquired Protection 1 in 2015.
ADT, spun off from fire safety and security systems maker Tyco International Plc (TYC.N) in 2012, had 166 million shares outstanding as of Dec. 31.
Barclays (BARC.L), Citigroup Global Markets Inc, Deutsche Bank (DBKGn.DE), Royal Bank of Canada (RY.TO) and PSP Investments Credit USA LLC are providing the financing for the deal.
BofA Merrill Lynch (BAC.N) and Goldman Sachs (GS.N) are ADT’s financial adviser for the transaction and Barclays, Citigroup Global Markets, Deutsche Bank and RBC Capital Markets LLC advised Protection 1.
Simpson Thacher & Bartlett LLP are ADT’s legal adviser, while Paul, Weiss, Rifkind, Wharton & Garrison LLP advised Protection 1 and Apollo.