ADT's Stock Rockets After Buyout Deal With Apollo Global Management

By Tomi KilgoreMarketWatch Pulse

ADT Corp.'s stock rocketed 50% in premarket trade Tuesday, after the home security company agreed to be acquired by private-equity firm Apollo Global Management in a deal valued at about $15 billion. Under terms of the deal ADT shareholders will received $42 a share in cash for each ADT share they own, which represents at 56% premium to Friday's closing price of $26.87. The deal, which is expected to close by June 2016, includes a "go-shop" period of 40 days, during which time ADT may actively look for alternative buyout bids. As part of the deal, ADT will be merged with Prime Security Services Borrower (Protection 1), which is also owned by Apollo, with the combined company to operate under the ADT brand. "This transaction represents a highly attractive premium for ADT's shareholders," said ADT Chief Executive Naren Gursahaney. "By combining Protection 1 with ADT, we will be better positioned to expand the breadth and depth of the services we offer to our customers throughout the United States and Canada." ADT's stock had dropped 21% over the past three months through Friday, while the S&P 500 has lost 9.2%. Apollo's stock was still inactive ahead of Tuesday's open.

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