Tyco Sells Korean Business To Carlyle For $1.9B

NEW YORK (The Deal) -- Carlyle Group LP prevailed in an auction with an agreement to pay $1.93 billion for the South Korean security operations of Tyco International (TYC).

Carlyle said on Monday that it will buy Tyco Fire & Security Services Korea Co. Ltd. and its three subsidiaries, collectively known as ADT Korea, from Tyco for just under 11 times forecast 2014 Ebitda of $180 million.

"ADT Korea is a highly stable and profitable business with attractive market positioning, strong brand power and excellent cash flow profile," said Carlyle Asia buyout managing director Sanghyun Lee in a statement. "Korea is one of the few countries in Asia that generate stable economic growth along with consistent deal flow of large buyout transactions."

Tyco said it expects to net $1.85 billion in cash from the sale and said the deal would cost it about $0.20 of earnings per share, per annum. Tyco's board said it would use the funds to increase a previously announced share buyback by $1.75 billion to $2 billion.

Seoul-based ADT Korea provides security services to about 475,000 businesses and residential customers and operates 69 outlets. The company is expected to post sales of $600 million in 2014, up from $560 million for 2013. It has an operating margin of about 21% and an Ebitda margin of 30%.

"While ADT Korea is healthy and profitable, this transaction represented a unique opportunity to realize the value generated in the business over time and redeploy it to further enhance our portfolio and maximize shareholder value," Tyco CEO George Oliver said in a statement.

If you liked this article you might like

Qualcomm's $47 Billion Mega-Deal for NXP: Where It Stacks Up in History

Cramer: Stocks That Defy the Fed's Gravitational Pull

Tyco Merger Slows Johnson Controls

Jim Cramer -- Johnson Controls Has More Upside

These 5 Blue-Chip Stocks Are Breaking Out in August