Private equity firm Apollo Global Management LLC (APO.N) is preparing to take U.S. security company ADT Corp public at a $15 billion plus valuation, just over a year after buying it, sources familiar with the situation said on Thursday.
The stock market listing could be the largest private equity-backed initial public offering since hotel company Hilton Worldwide Holdings Inc (HLT.N) went public with a $19.7 billion valuation in 2013.
It would be a quick turnaround for Apollo, which bought ADT for roughly $7 billion in 2016 and merged it with Protection 1, a smaller U.S. peer it had previously acquired.
The combined company was valued at $15 billion, including debt, Apollo said at the time.
Boca Raton, Florida-based ADT could register for the IPO with the U.S. Securities and Exchange Commission (SEC) by the fall and go public at the end of 2018, one of the sources said, cautioning the timing could change.
The sources requested anonymity because the IPO plans, first reported by The Wall Street Journal, are confidential.
Private equity firms tend to use a lot of debt to finance acquisitions. In recent years, IPO returns from these investments have thinned as investors worry about debt risk.
So far this year, private equity backed companies have raised $5.9 billion in public offerings, down 30 percent from the same period in 2015 and 70 percent in 2014, according to Thomson Reuters data. Last year, the total was $3.4 billion in what was a particularly slow year for IPOs across the board.
The largest private equity backed IPO so far this year was from industrial machinery maker Gardner Denver Holdings Inc (GDI.N), which began trading with a market capitalization of roughly $4 billion.
ADT is expected to have total 2017 revenue of about $4.0 billion, which is growing at a pace of roughly 2 percent, according to credit rating agency Moody’s.
Apollo acquired ADT as the credit markets tightened. To help fund it, Apollo and its co-investors agreed to provide $4.5 billion for the deal, a big equity check by leveraged buyout industry standards.
ADT started in 1874 as the American District Telegraph Company. It evolved into an alert box company and more recently has added on automation features that allow home video surveillance and remote locking and unlocking of doors.