ADT signs definitive agreement to sell Canadian ops to TELUS Corporation

Sale expected to result in a stronger ADT with improved capital efficiency
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Tuesday, October 1, 2019

BOCA RATON, Fla.—ADT Inc., a smart home security provider serving residential and business customers, today announced that it has entered into a definitive agreement to sell ADT Security Services Canada, Inc. to TELUS Corporation for approximately CA$700 million in cash, subject to certain adjustments. The transaction comprises all of ADT Canada’s operations and assets, and is expected to close in the fourth quarter of 2019, contingent on customary closing conditions and other business requirements, including approval of the transaction by the Canadian Competition Bureau. 

RBC Captial Markets and Barclays are serving as financial advisors to ADT and Osler, Hoskin & Harcourt, LLP is serving as legal advisor. 

“Opportunities continue to develop for ADT in the areas of smart home integration, the expansion of the home security business into new demographics and ADT’s growth in commercial security,” Jim DeVries, president and CEO, ADT, said in the announcement. “The sale of our more capital-intensive Canadian operations enables us to sharpen our focus on the exciting growth and higher margin opportunities in the U.S., where we can more efficiently invest our time and resources. Importantly, these emerging opportunities are ideal for leveraging the trusted ADT brand as we continue generating strong free cash flow to drive shareholder value over the long term.” 

ADT Board of Directors also announced that it authorized a one-time special dividend of up to US$550 million, with plans to set the dividend at US$0.70 per share. The special dividend is conditioned upon the closing of the transaction and is subject to subsequent corporate action, and therefore may not be in that amount, or occur at all. Details about the special dividend, including record date for shareholders’ eligibility to receive it and the payment date, will be provided in conjunction with the closing of the transaction. 

ADT expects to incur a non-cash charge in the third quarter in connection with the transaction, which may be material to ADT’s earnings. ADT plans to continue to execute on its previously disclosed capital allocation framework, which balances organic investments in the business, opportunistic bold-on M&A opportunities, returning capital to shareholders and delivering over time. 

For the fiscal year ended December 31, 2018, ADT Canada generated revenue of US$229 million.