Republic Industries Buys Burglar Alarm Company ADT
FORT LAUDERDALE, Fla. (AP) _ Republic Industries Inc., controlled by Florida entrepreneur Wayne Huizenga, said today it will buy burglar alarm company ADT Ltd. for $5 billion.
The companies said the deal will create the world’s largest provider of electronic security services with 1.6 customers in the United States, Canada, the United Kingdom and continental Europe.
ADT, which is based in Bermuda, is the largest provider of electronic security services in North America and Britain with 1.4 million customers and runs the second-largest used car auction house in the United States.
Republic Industries owns Kertz Security Systems, which provides electronic security to about 200,000 homes and businesses. It also owns startup used car chain AutoNation USA,.
The deal underscores Republic’s aggressive expansion since Huizenga took charge in 1995. The company has focused on growing its security and solid waste business. It also pushed into the used-car arena recently by buying AutoNation.
Huizenga said the acquisition will help strengthen Republic’s used-car operations.
Huizenga has a reputation for building businesses. He helped transform the video-rental business from an industry of mom-and-pop operations, growing Blockbuster Video from a small chain into the world’s leading video rental company.
Since he sold Blockbuster Video in 1994 to Viacom, Huizenga has been pursuing opportunities in the electronic security and used car businesses. Beside buying AutoNation, Republic recently shelled out $28 million for three electronic security alarm companies.
The merger ``is consistent with our strategy of enhancing shareholder value by building businesses in high-growth industries and capitalizing on opportunities to make these businesses well-recognized, branded leaders in their markets,″ Huizenga said.
In the past two years, his interests have extended to electronic security service, auto sales, solid waste hauling and extended-stay hotels through Republic. He also owns three Miami professional sports franchises.
Under the deal, ADT shareholders will receive .92857 shares of Republic common stock for each share of ADT common stock. The exchange ratio was based on a price of $26 per share of ADT common stock.
Republic anticipates issuing approximately 130 million shares of its common stock to complete the deal and reserving an additional 38 million shares for the exercise of ADT options and warrants
The transaction is intended to be tax-free to ADT’s shareholders and will be accounted for as a pooling of interests.
Michael A. Ashcroft will continue as ADT’s chairman and chief executive officer and become a member of Republic’s board. Other top ADT officers will stay on after the deal.
ADT’s security arm monitors commercial and residential security systems in North America and Europe.
ADT Automotive, which operates 29 vehicle auction centers in the United States, consists of vehicle auction centers, reconditioning services, vehicle resale, title assistance, data management, truck and equipment services, and inventory management of leased and fleet vehicles.
In afternoon trading on the Nasdaq Stock Market, Republic shares were down $2.25 at $26.87 1/2. ADT was up $3.62 1/2 at $22.62 1/2 per share on the New York Stock Exchange.