Five years after first backing ADT Caps, The Carlyle Group has agreed to sell the Korean security business to SK Telecom and Macquarie Infrastructure and Real Assets for an enterprise value of 2.97 trillion won (about $2.8 billion). The move marks the second high-profile exit this year for a PE firm from a business that carries the ADT brand, following the Apollo Global Management-backed IPO of the flagship ADT security business in the US in January.
If the deal closes as expected sometime in 2H, it will add another billion-dollar exit to Carlyle's tally for 2018. In early April, the firm completed the sale of Signode Industrial, a provider of transit and packaging services, to fellow packaging business Crown Holdings for some $3.9 billion.
Carlyle has completed more than 200 PE-backed exits since the start of 2010, according to PitchBook data, a number that reflects the scale of its investment activity. In the early part of the decade, the firm more frequently pursued sales to strategic acquirers. In recent years, though, that preference has flipped toward SBOs:
Carlyle acquired ADT Caps (fka ADT Korea) in 2014, taking over the company from Tyco Fire & Security Services in a cash deal valued at about $1.93 billion. The firm's purchase involved capital from two separate vehicles, Carlyle Asia Partners IV (a $3.9 billion fund from 2013) and Carlyle Partners VI (a $13 billion vehicle from the same year).
The new sale agreement calls for SK Telecom to assume a 55% stake in ADT Caps and for Macquarie to hold a 45% interest. The company's 2.97 trillion won enterprise value is equivalent to 11x the company's EBITDA and includes 1.7 trillion won in debt.