APi Group Corp. has entered into a definitive agreement to acquire the Chubb Fire & Security Business from Carrier Global Corp. for an enterprise value of $3.1 billion, which is comprised of $2.9 billion cash and approximately $200 million of assumed liabilities and other adjustments. The business is a fire safety and security provider, offering customers complete and reliable services from design and installation to monitoring and ongoing maintenance.
Russ Becker, APi’s president and chief executive officer stated, “This is a very exciting day in the history of APi. We have spent a tremendous amount of time evaluating several transformative opportunities as well as more traditional acquisitions. With the acquisition of Chubb, we see a tremendous amount of accelerated organic growth and margin expansion opportunities across our combined platform. There is also significant opportunity to leverage Chubb’s 200+ year history of providing statutorily required and route-based services through its internationally recognized brand. We look forward to providing additional details during our conference call today at 9:00 am (Eastern Time) and we look forward to welcoming Chubb’s 13,000 employees to our family of businesses.”
APi co-chair Martin Franklin commented, “The acquisition of Chubb transforms APi into the world’s leading life safety services provider. We believe the transaction will be highly accretive with significant synergy opportunities. Together, the business can move faster and more efficiently, globally leveraging the expertise and ability of our combined 26,000 dedicated and talented employees.”
APi co-chair James Lillie added, “This acquisition meets all of our previously stated, key strategic investment criteria. Chubb has a history of strong free cash flow generation, they are leaders in their niche markets and have an experienced leadership team. The acquisition strengthens our strategic platform and expands our geographical reach as the combined entity will have market-leading positions in key geographies. Importantly, 50%+ of our revenue will be service based with meaningful, statutorily-required, recurring revenue. We believe there is significant future value creation potential both through organic growth opportunities, as well as through continued incremental transformational and bolt-on M&A. We are delighted to welcome a combined $800 million investment in perpetual preferred equity from Blackstone and Viking Global Investors. Blackstone has a significant global property portfolio, which as our partner we expect to provide the combined company the opportunity to open new customer relationships in multiple markets.”
David Blitzer, global head of Blackstone Tactical Opportunities, said: “We are excited to partner with the APi team by investing in this highly strategic transaction. We believe the combined companies will be well positioned for long-term success and look forward to supporting their vision to create a global market leader.”
Citi and RBC Capital Markets acted as M&A advisors. Barclays and Citi provided committed financing. Greenberg Traurig acted as M&A legal counsel. Kane Kessler acted as legal counsel for the debt financing.