In Apollo Global Management's (NYSE: APO) first move in the home security space, the firm is buying and merging private equity-backed security companies Protection 1 and ASG Security.
Protection 1, headquartered in Romeoville, Illinois, provides security alarm monitoring in the U.S. The company installs, maintains and monitors security systems for residential and commercial customers.
ASG Security, headquartered in Beltsville, Maryland, is an electronic security and monitoring company with operations in the eastern and southwestern U.S. The company has been backed by Boston private equity firm Parthenon Capital Partners since 2007.
Protection 1 is backed by GTCR, which partnered with security industry expert Tim Whall to buy the company in 2010. The partnership is consistent with the firm's the Leaders Strategy, in which GTCR partners with a management executive to grow a company. Under GTCR and Whall's ownership, Protection 1 expanded its sales channels through acquisitions and management team additions.
Apollo, which has about $163 billion in assets under management, is making the acquisition through funds it manages. The New York-based investment firm plans to combine ASG Security with Protection 1. Whall will stay in place as CEO. Before Protection 1, Whall partnered with GTCR fo build security alarm businesses Cambridge Protection Indsutries and HSM Electronic Protection Services.
Morgan Stanley and Raymond James provided financial advice to Protection 1 and GTCR, and Latham & Watkins LLP acted as legal counsel. Paul Weiss Rifkind Wharton & Garrison LLP provided legal advice to the buyer. Cerdit Suisse, Barclays, Deutsche Bank, Jefferies and RBC are providing financing for the deal. Kirkland & Ellis LLP is ASG's legal counsel, and Goldman Sachs is acting as ASG's financial adviser.
In another building security deal, Robert Bosch North America Corp. acquired Climatec LLC, which provides security and other services to buildings, in January.
GTCR, which won Mergers & Acquisitions M&A Mid-Market Private Equity Firm of the Year award for 2013 in part because of the Leaders Strategy, has also recently partnered with Warburg Pincus to recapitalize Sterigenics International.