Tyco International and Brink's Home Security Holdings, announced a definitive agreement for Tyco to acquire Brink's Home Security Holdings, now operating as Broadview Security. Following the closing of the transaction, Tyco intends to combine Broadview with Tyco's ADT security business. The cash and stock transaction is valued at US$42.50 per share or approximately $2 billion. The transaction has been unanimously approved by the board of directors for each company.
The transaction combines two of the premier companies in the North American residential and commercial security industry. Broadview Security is a monitoring companies in North America. ADT is the world's largest electronic security provider. Tyco intends to combine the two businesses under the ADT name.
"This transaction provides us the opportunity to further strengthen our position in the residential and commercial security industry, while advancing Tyco's overall strategy to increase its presence in its core security, fire and flow control platforms," said Tyco Chairman and Chief Executive Officer Ed Breen. "Broadview's strong presence in the North American security market, significant recurring revenue and attractive margins will enhance ADT's financial performance and support our long-term growth in this large, fragmented and highly-competitive industry."
"We are proud of all we have achieved as a company to increase our customer base, and to grow our revenue and income in a challenging economy," said Bob Allen, President and Chief Executive Officer of Broadview. "We view this transaction as the culmination of these efforts, providing our shareholders with an attractive premium for their shares, including cash consideration and an opportunity to participate in the future growth of Tyco International."
"ADT and Broadview are an excellent strategic fit. We have highly complementary product and service offerings, strong sales and marketing organizations and a shared dedication to quality customer service," said Naren Gursahaney, President of ADT Worldwide. "We expect this combination to result in an even more efficient, more successful ADT."
Broadview Security has more than 1.3 million recurring revenue accounts throughout North America with annualized revenue of approximately $565 million. ADT has more than 7.4 million recurring revenue accounts globally and generated revenue of $7 billion in fiscal 2009. ADT's North American residential and small business operation, which is the most comparable to Broadview, has 4.8 million recurring revenue accounts and revenue of $2.2 billion in fiscal 2009.
The transaction is expected to close in the second half of Tyco's fiscal year, which began on Sept. 26, 2009. The transaction is subject to customary closing conditions, including clearance under the Hart-Scott-Rodino Act and the approval of Brink's Home Security Holdings shareholders.