Apollo-Backed ADT Falls After Pricing IPO Below the Range
Apollo-Backed ADT Raises $1.47 Billion, Pricing IPO Below Range
(Bloomberg) -- ADT Inc., the home-security company owned by Apollo Global Management LLC, fell during its first day of trading after raising less than expected in a U.S. initial public offering.
Shares of ADT tumbled 9.4 percent to $12.69 at 10:21 a.m. in New York. The company sold 105 million shares for $14 apiece Thursday to raise $1.47 billion. ADT had offered 111.1 million shares for $17 to $19 apiece.
ADT intends to use the proceeds to pay down debt and to redeem preferred securities held by Koch Industries Inc. New York-based buyout firm Apollo acquired ADT in 2016 for about $6.9 billion, or $12.3 billion including debt, through its existing portfolio company Protection One. ADT is led by Chief Executive Officer Tim Whall, previously Protection One’s CEO.
At the IPO price, Apollo’s paper profit on ADT is $2.4 billion, which is about 2.3 times its investment, said a person familiar with the matter who asked not to be identified because it was private. The fund wasn’t selling its shares as part of the offering, according to the prospectus.
Apollo will own about 85 percent of ADT after the IPO, according to the company’s regulatory filing.
ADT, which has about 7.2 million residential and business customers in the U.S. and Canada, had a net loss of $296 million on revenue of $3.2 billion in the first nine months of last year. In 2016, it posted a net loss of $537 million on revenue of $2.9 billion.
Morgan Stanley and Goldman Sachs Group Inc. led the offering. The company is trading on the New York Stock Exchange under the ticker ADT.
To contact the reporter on this story: Alex Barinka in New York at abarinka2@bloomberg.net.
To contact the editors responsible for this story: Elizabeth Fournier at efournier5@bloomberg.net, Michael Hytha
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