ADT Corp (ADT) To Be Acquired For $42 Per Share

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Shares of ADT Corp (NYSE:ADT) are soaring in the pre-market this morning after the private equity firm, Apollo Global came to an agreement with ADT’s board of directors to acquire the company for $42 per share in cash.

At the close of Friday, ADT Corp (NYSE:ADT) had a market value of around $4.4 billion. This deal will value the company at $7 billion, providing shareholders with a 56% gain over Friday’s close once the deal is finalized. Shares of ADT had been trading down, near 52-week lows and off of their 52 week high, just north of $42. It appears as if Apollo Global is taking advantage of this depressed market to find value in the home security giant.

The combined entity will be worth around $15 billion and will be headquartered in Boca Raton, Florida. A handful of banks including Deutsche Bank, Royal Bank of Canada, Barclays and others will be providing the financing for this deal.

The stock increased 1.90% or $0.5 during the last trading session, hitting $26.87. About 362,184 shares traded hands. ADT has declined 17.68% since July 10, 2015 and is downtrending. It has underperformed the S&P500 by 8.81%.

From a total of 3 analysts covering ADT Corporation (NYSE:ADT) stock, 2 rate it a “Buy”, 0 a “Sell”, and 1 a “Hold”. This means that 67% of the ratings are positive. The highest target price is $46 while the lowest target price is $30. The mean of all analyst targets is $36.75 which is 36.77% above today’s ($26.87) stock price. ADT Corporation was the topic of 5 analyst reports since July 27, 2015 according to the firm StockzIntelligence Inc. Barclays Capital upgraded shares on October 5 to a “Equal-Weight” rating. Zacks upgraded ADT stock in a recent report from August 4 to a “Sell” rating.

The institutional sentiment decreased to 0.82 in Q2 2015. It’s down 0.13, from 0.95 in 2015Q2. The ratio worsened, as 62 funds sold all their ADT Corp shares they owned while 160 reduced their positions. 36 funds bought stakes while 147 increased their total positions. Institutions now own 187.14 million shares which is 7.51% less than the previous share count of 202.33 million in 2015Q2.

12Th Street Asset Management Company Llc holds 7.76% of its total portfolio in ADT Corp, equating to 707,727 shares. Alethea Capital Management Llc owns 80,198 shares representing 3.64% of their total US portfolio. Moreover, Southernsun Asset Management Llc has 3.58% of their total portfolio invested in the company, equating to 5.42 million shares. The New York-based Clovis Capital Management Lp has a total of 2.84% of their portfolio invested in the stock. Reinhart Partners Inc., a Wisconsin-based fund reported 903,657 shares owned.

The ADT Corporation is a provider of monitored security, interactive home and business automation and related monitoring services in the United States and Canada. The company has a market cap of $4.53 billion. The Company’s services and products include home and business solutions and home health services. It has 15.84 P/E ratio. The Company’s brands include ADT and ADT Pulse.

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