Tyco to sell S Korean security business to Carlyle Group for $1.93 bn
04 Mar 2014
Swiss security systems company Tyco International Ltd yesterday struck a deal to sell its South Korean security business to US private equity firm Carlyle Group for $1.93 billion.
The deal is the second large private equity transaction in South Korea this year, after Anheuser-Busch InBev bought back Oriental Brewery from KKR & Co and Affinity Equity Partners for $5.8 billion. (See: Anheuser-Busch InBev buys back S Korea's Oriental Brewery for $5.8 bn)
Tyco, the $100-billion company, which has its US operational headquarters in New Jersey, had put its subsidiary Tyco Fire & Security Services and its subsidiaries (ADT Caps, Capstec Co, and ADT Security) for sale last year.
Reuters had earlier reported that private equity firms including Affinity Equity Partners, Bain Capital, Carlyle Group, KKR and South Korea's MBK Partners, had tabled bids.
Tyco said that the net cash proceeds from the transaction of $1.85 billion will be deployed for earnings-accretive activities, such as strategic acquisitions, share repurchases and organic growth initiatives, as well as other corporate purposes.
DT Korea is a leading provider of advanced security solutions in South Korea, serving approximately 475,000 small-and-medium-sized businesses, commercial and residential customers.
The Seoul-based business provides central monitoring services, with video surveillance and dispatch, access control and other customized security solutions as well as guarding services.
DT Korea has approximately 7,500 employees and a nationwide network of 69 branches.
For fiscal 2014, ADT Korea is expected to generate revenue and operating income of approximately $600 million and $125 million, respectively,
"We are pleased to announce the sale of ADT Korea in a transaction that provides value to our shareholders," said George Oliver, Tyco's CEO. "While ADT Korea is healthy and profitable, this transaction represented a unique opportunity to realise the value generated in the business over time and redeploy it to further enhance our portfolio and maximise shareholder value."