ADT Announces Launch of Secondary Public Offering of Common Stock and Concurrent Share Repurchase

Rhea-AI Summary

ADT Inc. (NYSE: ADT) announced a secondary public offering of 56,000,000 shares of common stock by Apollo Global Management affiliates, with underwriters having a 30-day option for an additional 8,400,000 shares. ADT will not receive proceeds from this offering but plans to repurchase 16,000,000 shares concurrently as part of its existing $350 million share repurchase program. The offering will be managed by Barclays, Citigroup, and BTIG as book-running managers, who will not receive underwriting fees for shares repurchased by ADT.

Positive

• Company executing on existing $350 million share repurchase program
• No underwriting fees for repurchased shares, reducing transaction costs

Negative

• Large secondary offering of 56 million shares could pressure stock price
• Significant insider selling by Apollo Global Management affiliates
• Additional 8.4 million shares could be sold through underwriters' option

Insights

Financial Analyst

This secondary offering and share repurchase transaction reveals significant shifts in ADT's ownership structure and capital allocation strategy. Apollo Global Management is reducing its stake by offering 56 million shares with an additional 8.4 million share option, signaling a substantial exit move. Simultaneously, ADT's commitment to repurchase 16 million shares demonstrates confidence in their valuation and effective use of their $350 million buyback program.

The transaction structure is notably efficient - ADT avoids underwriting fees on repurchased shares while providing Apollo liquidity. The remaining shares will be sold through various market mechanisms, potentially creating short-term price pressure. However, the company's willingness to buy back shares at market prices suggests management views current valuation levels as attractive.

BOCA RATON, Fla., Oct. 28, 2024 (GLOBE NEWSWIRE) -- ADT Inc. (NYSE: ADT) (“ADT” or the “Company”) today announced a proposed secondary public offering of 56,000,000 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 8,400,000 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 16,000,000 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 $350 million share repurchase program. The underwriters will not receive any underwriting fees for the shares being repurchased by the Company.

The underwriters may offer the shares of common stock, other than shares subject to the Share Repurchase, from time to time for sale in one or more transactions to purchasers, directly or through agents, or through brokers in brokerage transactions, on the New York Stock Exchange, in the over-the-counter market, through negotiated transactions or in a combination of such methods of sale, at a fixed price or prices, which may be changed, or otherwise at market prices prevailing at the time of sale, at prices related to prevailing market prices or at negotiated prices, subject to receipt and acceptance by them and subject to their right to reject any order in whole or in part.

Barclays, Citigroup and BTIG 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: Barclays Capital Inc., c/o Broadridge Financial Solutions, 1155 Long Island Avenue Edgewood, NY 11717, by telephone: (888) 603-5847 or by email at Barclaysprospectus@broadridge.com, Citigroup, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, by telephone at (800-831-9146) and BTIG, LLC, 350 Bush Street, 9th FL, San Francisco, CA 94104, Attention: Syndicate Department, by telephone: (415-248-2200) or by email at prospectusdelivery@btig.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 may constitute “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and are made in reliance on the safe harbor protections provided thereunder. While ADT has specifically identified certain information as being forward-looking in the context of its presentation, we caution you that all statements contained in this press release that are not clearly historical in nature, including, 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 “ongoing,” “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. For ADT, particular uncertainties that could cause our actual results to be materially different than those expressed in our forward-looking statements include, without limitation, 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, the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2024 and the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2024 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 represents our estimates and assumptions only as of the date of this press release and, except as required by law, ADT undertakes no obligation to update or review publicly any forward-looking statements, whether as a result of new information, future events, or otherwise after the date of this press release.

FAQ

How many shares is ADT offering in its October 2024 secondary offering?

The secondary offering consists of 56,000,000 shares, with underwriters having a 30-day option for an additional 8,400,000 shares.

Will ADT receive any proceeds from the 2024 secondary offering?

No, ADT will not receive any proceeds as this is a secondary offering by selling stockholders (Apollo Global Management affiliates).

How many shares will ADT repurchase in the concurrent share repurchase?

ADT plans to repurchase 16,000,000 shares as part of the secondary offering under its existing $350 million share repurchase program.

Who are the underwriters for ADT's 2024 secondary offering?

Barclays, Citigroup, and BTIG are acting as book-running managers for the proposed offering.