ADT Inc. (NYSE: ADT) entered the market quietly on Friday after the firm priced its initial public offering well below expectations. The firm priced its shares at $14 apiece for its initial debut, below the expected price range. As if that pricing wasn’t enough, shares entered the market even lower than that.
Originally, the company wanted to price its 111.11 million shares in the range of $17 to $19 per share, with an overallotment option for an additional 16.67 million shares. This would value entire offering at roughly $2.43 billion, at the maximum price. However, the $14 price implies a valuation of approximately $1.79 billion.
The underwriters for the offering are Morgan Stanley, Goldman Sachs, Barclays, Deutsche Bank, RBC Capital Markets, Citigroup, Merrill Lynch, Credit Suisse, Imperial Capital, Academy Securities, Allen, Apollo Global Securities, Citizens Capital Markets, LionTree, SunTrust Robinson Humphrey and Williams Capital Group.
This is the leading provider of monitored security, interactive home and business automation and related monitoring services in the United States and Canada. Its mission is to help customers protect and connect to what matters most — their families, homes and businesses.
A 2017 survey found that the ADT brand had approximately 95% brand awareness, and nearly half of ADT customers surveyed did not consider any other security alarm provider during their purchase process.
ADT estimates that it is approximately five times larger than the next largest residential competitor, with an approximate 30% market share of the residential monitored security industry in the United States and Canada. Excluding contracts monitored but not owned, the firm currently serves roughly 7.2 million residential and business customers, making it the largest company of its kind in the United States and Canada.
The firm is one of the largest full-service companies with a national footprint providing both residential and commercial monitored security. ADT has 18,000 employees that visit roughly 10,000 homes and businesses daily. It handles about 15 million alarms annually.
ADT intends to use the net proceeds from this offering to repay its indebtedness, as well as for working capital and general corporate purposes.
Shares of ADT were last seen at $12.56, with a range of $12.06 to $12.97 on the day. More than 43 million shares had moved thus far.