Swiss security systems company Tyco International said Monday it is selling its South Korean fire protection and security unit to buyout firm the Carlyle Group for $1.93 billion in cash.
Carlyle is acquiring ADT Korea—which includes Tyco Fire & Security Services Korea, along with multiple subsidiaries—after beating out rival bids from a number of fellow private equity firms, including Affinity Equity Partners, Bain Capital, KKR and South Korea’s MBK Partners, according to Reuters. The unit, which went up for sale last fall, provides security services such as video surveillance and access control to roughly 475,000 commercial and residential customers in South Korea. ADT Korea is expected to generate roughly $600 million in the current fiscal year.
The deal is expected to close in the second quarter, pending regulatory approval. Tyco said Monday that it expects to net $1.85 billion from the deal, a sum the company will put toward future acquisitions as well as a share buyback program. Tyco’s board also announced Monday that it has approved an additional share buyback of $1.75 billion that will combine with a previously planned $250 million repurchase for a total buyback of $2 billion.
Carlyle is being advised by magic circle firm Clifford Chance as well as South Korea’s Lee & Ko on the deal. Clifford Chance has a long history of advising Carlyle on transactional matters including handling the buyout firm’s $1 billion sale of its Talaris teller machine and cash-counting equipment business to Glory Ltd. in 2012. Earlier this year, Clifford Chance also represented Carlyle’s oil and gas fund on the investment of up to $200 million in London-based Discover Exploration Limited and on the creation of European midstream joint venture with Vitol Group.
Seoul-based capital markets partner Hyun Suk Kim and Hong Kong-based M&A partner Simon Cooke are leading the Clifford Chance team advising on Monday’s deal.
Jeffrey Ferguson is Carlyle’s general counsel.
Meanwhile, Tyco is receiving legal advice from its longtime outside counsel Simpson, Thacher & Bartlett as well as from South Korean firm Kim & Chang. New York-based corporate partner Alan Klein is leading a Simpson team that also includes IP partner Lori Lesser and tax partner Robert Holo. Corporate partner Jin Park and credit partner Sinead O’Shea, both of whom are based in Hong Kong, are also working on the deal. Tyco’s general counsel is Judith Reinsdorf.
In 2011, Tyco called on Simpson when the company decided, in a $700 million transaction, to split itself into three separate, publicly-traded companies based on its main product areas: home security systems, flow control equipment and commercial fire and security systems. Less than a year after that break-up was announced, Tyco again enlisted Simpson and McDermott Will & Emery for the $10 billion sale of one of the newly-created independent companies, Tyco Flow Control, which was purchased by Pentair in March 2012.