Sunday, May 6, 2018

Carlyle Sells Korean Security Firm for $800 Million Profit

The Carlyle Group will monetize ADT Caps, a South Korean security services provider.  Carlyle purchased ADT from Tyco International in March 2014 for $1.93 billion.  Sources say Carlyle will garner $2.78 billion for ADT Caps.  Three years ago Carlyle highlighted its long term commitment to South Korea.  Those words resonated in a country that values interdependence and long term thinking.

The United States is a near polar opposite on those two parameters.  Individualistic, short term thinking is personified by private equity underwriters (PEU). 

The greed and leverage boys are never satisfied. It appears Carlyle will make over $800 million from flipping ADT Caps.  Between deal fees, management fees, dividends, and/or dividend recaps Carlyle could've appropriated even more cash from ADT during its ownership.  News reports had Carlyle willing to arrange deal financing so it could make huge returns.

The Carlyle Group is known for its ability to read tea leaves and influence world events.

What makes this a good time for a PEU to sell a South Korean security firm?