The Carlyle Group is to acquire a 100% stake in Tyco Fire & Security Services Korea Co. Ltd. and its subsidiaries that form and operate the company’s Korean security business from Tyco, a pure-play fire protection and security company. The transaction is valued at approximately $1.93 billion.
Global alternative asset manager The Carlyle Group (NASDAQ: CG) has agreed to acquire a 100% stake each in Tyco Fire & Security Services Korea Co. Ltd. and its subsidiaries (ADT Caps Co., Ltd., Capstec Co., Ltd. and ADT Security Co., Ltd.) that form and operate the Company’s Korean security business (“ADT Korea”), from Tyco (NYSE: TYC), the world’s largest pure-play fire protection and security company, in a cash transaction valued at approximately $1.93 billion. The transaction is the largest private equity buyout deal in US dollar value in Korea since 2008. The transaction is subject to customary closing conditions including required regulatory approval and is expected to close in the second quarter of 2014.
ADT Korea is a provider of advanced security solutions in Korea, serving approximately 475,000 small-and-medium-sized businesses, commercial and residential customers. The business provides central monitoring services, with video surveillance and dispatch, access control and other customized security solutions as well as guarding services. The business is headquartered in Seoul, Korea, with approximately 7,500 employees and a nationwide network that includes 69 branches.
Sanghyun Lee, Managing Director on the Carlyle Asia Buyout team, said, “ADT Korea is a highly stable and profitable business with attractive market positioning, strong brand power and excellent cash flow profile. We believe the Korean security services industry is under-penetrated, and growing awareness and needs for safety will anchor significant growth in the future. Korea is one of the few countries in Asia that generate stable economic growth along with consistent deal flow of large buyout transactions. Carlyle’s investment in ADT Korea once again accentuates our long-standing commitment to Korea since the establishment of Carlyle Korea in 1999.”
Cedric Bobo, Principal on the Carlyle US Buyout team, said, “This is a great opportunity to create value by leveraging Carlyle’s deep industry expertise and global network to support future growth and realize the Company’s full potential as it transitions into a standalone company.”
George Oliver, Chief Executive Officer of Tyco, said, “ADT Korea is a healthy and profitable business and a leader in the South Korean market, with a strong management team and highly dedicated employees. We are grateful to them for their contributions to Tyco and know they will continue to thrive within The Carlyle Group.”
Equity for the transaction will come from Carlyle Asia Partners IV and Carlyle Partners VI. Carlyle has invested more than $920 million of equity in 17 transactions in Korea as of December 31, 2013. Carlyle’s current and former investments in Korea include KorAm Bank, Hyundai HCN, EO Technics, Tapex, and Yakjin Trading.
The Carlyle Group has secured committed debt financing from Korea Exchange Bank, Kookmin Bank, Industrial Bank of Korea, Korea Investment & Securities and UBS AG. Clifford Chance and Lee & Ko are legal advisors to The Carlyle Group.
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About The Carlyle Group
The Carlyle Group (NASDAQ: CG) is a global alternative asset manager with approximately $189 billion of assets under management across 118 funds and 100 fund of funds vehicles as of December 31, 2013. Carlyle’s purpose is to invest wisely and create value on behalf of its investors, many of whom are public pensions. Carlyle invests across four segments – Corporate Private Equity, Real Assets, Global Market Strategies and Solutions – in Africa, Asia, Australia, Europe, the Middle East, North America and South America. Carlyle has expertise in various industries, including: consumer & retail, energy, financial services, aerospace, defense & government services, healthcare, industrial, real estate, technology & business services, telecommunications & media and transportation. The Carlyle Group employs more than 1,500 people in 34 offices across six continents.