ADT Corp. To Be Acquired By Apollo Global For $42.00/shr In Cash

(RTTNews) - ADT Corp. (ADT) said that it agreed to be acquired by an affiliate of certain funds managed by affiliates of Apollo Global Management LLC (APO) and co-investors and merged with a subsidiary of Prime Security Services Borrower, LLC or Protection 1, for $42.00 per share in cash.

The purchase price represents a premium of approximately 56% over ADT's closing share price on February 12, 2016 and, when combined with Protection 1, represents an aggregate transaction value of approximately $15 billion. The headquarters of the combined company will remain in Boca Raton, FL, and the combined company will operate primarily under the ADT brand.

The Board of Directors of ADT unanimously approved the transaction. The acquisition of ADT is expected to be completed by June 2016. The transaction is subject to the conclusion of the applicable antitrust waiting periods in the United States and Canada, ADT stockholder approval and other customary closing conditions.

The merger agreement includes a "go-shop" period, during which ADT and its Board of Directors may actively solicit, receive, evaluate and potentially enter into negotiations with parties that offer alternative proposals during a 40-day period following the execution date of the definitive agreement.

The transaction, which has fully committed financing in place, will be financed primarily through the incurrence of $1.555 billion in new first lien term loans, $3.140 billion in new second lien financing, the issuance of $750 million of preferred securities to an affiliate of Koch Equity Development LLC, the investment and acquisition subsidiary of Koch Industries, Inc., and an equity contribution of about $4.5 billion from funds managed by Apollo and co-investors.

Protection 1 will also enter into a new $255 million first lien revolving facility concurrently with the closing of the merger, bringing the total combined senior secured revolving facility to $350 million. Protection 1 further expects that its existing $1,095 million first lien term loan and $260 million second lien term loan will remain outstanding.

In addition, concurrently with the closing of the merger, Protection 1 intends to redeem all of ADT's outstanding senior unsecured 2.250% notes due July 2017 and senior unsecured 4.125% notes due April 2019, which will be redeemed in accordance with the applicable indenture, and to repay all outstanding borrowings under ADT's revolving credit facility. ADT's remaining $3.750 billion of total senior unsecured notes will be guaranteed by Protection 1 and all wholly owned domestic subsidiaries of the combined company and will be secured by first priority security interests in substantially all of the assets of the issuer and the guarantors. As a result, Protection 1 expects that these notes will maintain their current ratings and remain outstanding.