Subscriber Discussion

Why Is ADT / Apollo Rushing To The Exits Via IPO?

LJ
Lee Jones
•Jan 14, 2018
Support Services Group

Why is ADT/Apollo rushing to the exits via IPO?

Announced in November, Filed in December, Begin trading January 19.

Maybe before full disclosure is required, exposing collapse of a basic alarm industry business model,

~~ including law enforcement pulling out of historic public/private partnerships;

~~ including false alarm fines/ fees becoming the responsibility of monitoring firms, like ADT, vs the customer;

~~ including some customer contracts un-enforceable due to non-disclosure;

~~ including a wave of adverse publicity (full disclosure) via social media, followed by higher attrition;

Can you add to the list…

Source; Lee Jones; Support Services Group; leessg@att.net

(1)
JH
John Honovich
•Jan 14, 2018
IPVM

I am not covering this that closely but my understanding was that Apollo was going to maintain a majority share even post IPO, e.g., this report:

Apollo Global Management, which took the company private in February 2016 in a $6.9 billion leveraged buyout, will continue to own the majority of the shares, making ADT a “controlled company” under NYSE rules. That means Apollo continues to call the shots.

To that end, unless that is wrong, they are not exiting yet. Thoughts?

(1)
LJ
Lee Jones
•Jan 14, 2018
Support Services Group

I can only offer a layman reply…

After trading begins, and after the lock-up dates, the “insiders” can dump/trade their personal holdings. And management can change their exit strategies.

(1)
JH
John Honovich
•Jan 14, 2018
IPVM
In reply to Lee Jones

They may very well do so in the next year or two. As a counter, Apollo is a private equity, they exist to buy / fix / sell companies, not operate long-term businesses. If they can get the same profit or anywhere close to the same in 3 years rather than 5, they would likely be happy to do that.

I am not saying the alarm industry does not have issues (I simply don't know it deep enough to take a strong position). What I am saying is that private equity firms looking to quickly get and out of deals is the nature of the game.

LJ
Lee Jones
•Jan 14, 2018
Support Services Group

Totally Agree… I try to do the same, buy low sell high.

However, the rewards should not be at the expense of your friends and colleagues that bet on your honesty and integrity.

And investors should be able to do pre-IPO research without manipulation… thus my “research” comments.

LJ
Lee Jones
•Jan 17, 2018
Support Services Group

We can fantasize about the short term and long term “up-side” of a successful ADT/Apollo IPO, now planned for Friday January 19 and priced between $17 and $19 per share.

But, what can be a “down-side” of a successful ADT/Apollo IPO?

As a layman in these matters, I understand that belated “disclosure” issues could disrupt the norm, and if “plausible deniability” does not qualify, the matter could get ugly. To date, some critical non-disclosure issues have been well known by industry leadership, but camouflaged to a low profile. We believe the IPO could provide high visibility “disclosure”, enough to quickly degrade the entire industry, including several thousand innocent stakeholders who may have been manipulated. We were surprised by the quick IPO date… we were expecting the IPO to be near year-end 2018, providing time for industry leadership to correct and balance some of the disruptive issues.

New discussion

Ask questions and get answers to your physical security questions from IPVM team members and fellow subscribers.

Newest discussions