Carlyle Korea

Carlyle buys ADT Korea for $1.93bn - update

The global private equity firm agreed to acquire the Korean security business ADT Korea from Tyco for $1.93 billion in cash – the biggest buyout in the country since 2008.

Carlyle said on Monday that it has agreed to pay $1.93 billion to buy South Korean security business ADT Korea from Tyco, the world’s largest pure-play fire protection and security firm.

The all-cash transaction is the largest private equity buyout deal in South Korea since 2008.

In the auction, which kicked off late last year, Carlyle beat out other private equity firms including Affinity, KKR, MBK and Bain, according to the people familiar with the situation.

“The Korean security services industry is under-penetrated, and growing awareness and needs for safety will anchor significant growth in the future,” said Sanghyun Lee, Managing Director on the Carlyle Asia buyout team.

The financing for Carlyle’s purchase demonstrates the liquidity in the Korean bank market which advisers and funds hope will encourage further LBOs and corporate spin offs. 

Equity for the transaction will come from Carlyle Asia Partners IV and Carlyle Partners VI.

Carlyle also secured committed debt financing from Korea Exchange Bank, Kookmin Bank, Industrial Bank of Korea, Korea Investment & Securities and UBS.

This financing was in the form of about 930 billion Korean won (US$867 million) five-year loan with a bullet repayment according to people familiar with the matter. 

UBS led the institutional tranche of about 360 billion Korean won (US$340 million) worth of mezzanine financing.  

ADT Korea sells security solutions in South Korea to about 475,000 small-and-medium-sized businesses, commercial and residential customers. It provides central monitoring services, with video surveillance and dispatch, access control and other customised security solutions as well as guard services. 

The Seoul-headquartered company has about 7,500 employees and a nationwide network that includes 69 branches.

Clifford Chance and Lee & Ko are legal advisors to Carlyle.

Carlyle, which set up shop in Korea in 1999, had invested more than $920 million in 17 transactions in South Korea as of December 31. Current and former investments include KorAm Bank, Hyundai HCN, EO Technics, Tapex, and Yakjin Trading.

The ADT Korea transaction is subject to customary closing conditions, including regulatory approval, and is expected to close in the second quarter of 2014.

¬ Haymarket Media Limited. All rights reserved.
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