ADT Announces Launch of Secondary Public Offering of Common Stock and Concurrent Share Repurchase
- None.
- ADT Inc. will not receive any proceeds from the proposed offering, potentially impacting its cash reserves and financial flexibility in the short term.
Insights
The secondary public offering of 55 million shares by entities managed by affiliates of Apollo Global Management represents a significant event for ADT Inc. and its investors. This move could indicate Apollo's strategy to diversify or liquidate part of their investment, which may affect ADT's stock liquidity and investor perception. With the additional 30-day option for underwriters to purchase up to 8.25 million more shares, there is a potential for increased market supply that could put downward pressure on the stock price in the short term.
The concurrent share repurchase by ADT, however, signals confidence by the company in its own stock and could counterbalance the selling pressure by supporting the stock price. The fact that the repurchase is part of an existing $350 million program shows a planned capital allocation strategy. This repurchase will reduce the number of shares outstanding, potentially increasing earnings per share (EPS) and shareholder value over the long term. The absence of underwriting fees for the repurchased shares also highlights cost savings for ADT.
Investors should monitor the market's reaction to these developments. The involvement of prominent financial institutions as book-running managers could enhance the offering's credibility, potentially attracting institutional investors and affecting the stock's trading volume and volatility.
The dynamics of this secondary offering and share repurchase by ADT Inc. could have implications for the home security industry as a whole. ADT's decisions may reflect broader market trends or company-specific strategies. The offering's success and the subsequent share price performance could serve as a barometer for investor sentiment towards the industry.
It is also important to consider the competitive landscape. If ADT is perceived as financially strengthening through this strategic maneuver, it may gain a competitive edge. Conversely, if the market interprets the large sale by Apollo as a lack of confidence in ADT's future prospects, it could have a detrimental effect on ADT's market positioning. Observing competitor reactions and market share shifts following these financial moves will provide additional insights into the industry's health and ADT's place within it.
From a legal perspective, the effectiveness of the shelf registration statement and the filing of a preliminary prospectus supplement with the Securities and Exchange Commission are critical steps in ensuring regulatory compliance for the secondary offering. Interested parties are encouraged to review these documents for a comprehensive understanding of the offering's terms, risks and the company's financial standing.
Moreover, the legal intricacies of such transactions, including the underwriters' 30-day option and the conditions under which the share repurchase is authorized, must be carefully structured to adhere to securities law and protect shareholder interests. The absence of underwriting fees for the repurchased shares could also be seen as a strategic legal structuring to benefit ADT's financial position.
BOCA RATON, Fla., March 06, 2024 (GLOBE NEWSWIRE) -- ADT Inc. (NYSE: ADT) (“ADT” or the “Company”) today announced the commencement of a proposed secondary public offering of 55,000,000 shares of the Company’s common stock held by certain entities managed by affiliates of Apollo Global Management, Inc. (the “Selling Stockholders”). The underwriters will have a 30-day option to purchase up to an additional 8,250,000 shares of common stock from the Selling Stockholders. The Company is not selling any shares and will not receive any proceeds from the proposed offering.
In addition, ADT has authorized the concurrent purchase from the underwriters of 15,000,000 shares of common stock as part of the secondary public offering (the “Share Repurchase”) subject to the completion of the offering. The Share Repurchase is part of the Company’s existing
Morgan Stanley, Barclays, Apollo Global Securities and RBC Capital Markets are acting as book-running managers for the proposed offering.
A shelf registration statement (including a prospectus) relating to these securities has been filed with the Securities and Exchange Commission (the “Commission”) and is effective. A preliminary prospectus supplement relating to the offering has also been filed with the Commission. Before investing, interested parties should read the shelf registration statement, preliminary prospectus supplement and other documents filed with the Commission for information about ADT and the offering. You may get these documents for free by visiting EDGAR on the Commission’s website at sec.gov. Alternatively, a copy may be obtained from: Morgan Stanley & Co. LLC, Attn: Prospectus Department, at 180 Varick Street, 2nd Floor, New York, New York 10014, Barclays Capital Inc., c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, by telephone (toll-free): (888) 603-5847 or by emailing: barclaysprospectus@broadridge.com, Apollo Global Securities, 9 West 57th Street, 41st Floor, New York, New York 10019 or RBC Capital Markets, LLC, Attention: Equity Capital Markets, 200 Vesey Street, New York, NY 10281, by telephone at 877-822-4089 or by email at equityprospectus@rbccm.com.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
About ADT Inc.
ADT provides safe, smart and sustainable solutions for people, homes and small businesses. Through innovative offerings, unrivaled safety and a premium customer experience, all delivered by the largest network of smart home security professionals in the U.S., we empower people to protect and connect to what matters most.
ADT Contacts
Investor Relations: investorrelations@adt.com; 888-238-8525
Media Relations: media@adt.com.
Forward-Looking Statements
ADT has made statements in this press release that are forward-looking and therefore subject to risks and uncertainties, including those described below. All statements, other than statements of historical fact, included in this document are, or could be, “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and the applicable rules and regulations of the Commission and are made in reliance on the safe harbor protections provided thereunder. These forward-looking statements relate to, among other things, the proposed secondary public offering of the common stock; the proposed repurchase of shares of the common stock; any stated or implied outcomes with regards to the foregoing; and other matters. Without limiting the generality of the preceding sentences, any time the Company uses the words “expects,” “intends,” “will,” “anticipates,” “believes,” “confident,” “continue,” “propose,” “seeks,” “could,” “may,” “should,” “estimates,” “forecasts,” “might,” “goals,” “objectives,” “targets,” “planned,” “projects,” and, in each case, their negative or other various or comparable terminology, and similar expressions, the Company intends to clearly express that the information deals with possible future events and is forward-looking in nature. However, the absence of these words or similar expressions does not mean that a statement is not forward-looking. These forward-looking statements are based on management’s current beliefs and assumptions and on information currently available to management. ADT cautions that these statements are subject to risks and uncertainties, many of which are outside of ADT’s control, and could cause future events or results to be materially different from those stated or implied in this press release, including among others, risks related to and the effect of the proposed secondary public offering of the common stock; activity in repurchasing shares of ADT’s common stock; and risks that are described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 and other filings with the Commission, including the sections titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained therein. Any forward-looking statement made in this press release speaks only as of the date on which it is made. ADT undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments, or otherwise.
FAQ
How many shares are being offered in ADT's secondary public offering?
Who are the underwriters for ADT's proposed offering?
What is the purpose of ADT's Share Repurchase in the secondary public offering?
Will ADT receive any proceeds from the proposed offering?
Has a shelf registration statement been filed with the Securities and Exchange Commission for ADT's offering?
