Apollo tries again to crack ADT code
APO•Apollo Global Management agreed to provide the financing commitment for Thrive Holdings’ $15.3 billion acquisition of ADT, after exiting a decade of ADT ownership with a calculated return of less than 10%. Thrive plans to fund roughly 60% of the purchase price with debt.
1. A new financing role
Apollo Global Management is financing Thrive Holdings’ agreement to take home and business security provider ADT private for $15.3 billion, including debt. Thrive will pay $10 per share, a 46% premium to ADT’s October 27 closing price, valuing its equity at about $7.6 billion.
2. ADT’s growth challenge
ADT’s revenue has grown about 4% annually on average since 2023, when it sold its commercial security business to pay down debt. The company introduced its app-based Blu system this year as some property owners opt for do-it-yourself products such as Amazon’s Ring doorbells.
3. Apollo’s prior investment
Apollo invested $3.5 billion in equity alongside co-investors for its 2016 acquisition of ADT, combining it with Protection 1 and ASG, on which Apollo spent about $760 million. After ADT borrowed to pay a $750 million dividend to backers in 2017, Apollo collected fees and dividends and sold shares over time; its final sale in May capped a calculated return of less than 10%. Thrive plans to use roughly 60% debt for the purchase, while Apollo’s initial financing commitment will be larger than its 2016 equity investment.
