KKR, Bain among bidders for Tyco's $1.6 billion South Korea unit: sources

Mon Dec 9, 2013 1:31am EST
 
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By Stephen Aldred and Denny Thomas

HONG KONG (Reuters) - KKR & Co LP (KKR.N: Quote) and Bain Capital are among suitors which have placed initial bids for Tyco International Inc's TYC.N South Korean security systems unit, a business valued at about $1.6 billion, people familiar with the matter said.

Billion-dollar buyouts are rare in Asia, but security companies, when they come up for sale, tend to attract much interest from private equity firms as they are valued for their stable revenues.

A sale of ADT Caps, would follow Bain's $3.4 billion purchase of European security firm Securitas Direct in 2011 and Blackstone Group's (BX.N: Quote) acquisition of U.S. firm Vivint Inc for more than $2 billion last year.

Other bidders for ADT Caps include CVC Capital Partners CVC.UL as well as Hong Kong-based Affinity Equity Partners and South Korea's MBK Partners, the sources said, declining to be identified as the process is confidential.

KKR, Bain, CVC and MBK declined to comment. Tyco and Affinity did not respond to emails seeking comment.

Morgan Stanley (MS.N: Quote) is advising Tyco on the sale, the sources said. Morgan Stanley declined to comment.

Tyco, a provider of commercial fire and security systems, became a much smaller company after the diversified conglomerate Tyco International split up last year. Its North American home security arm, ADT ADT.N, became a separate company and its former flow control unit merged with Pentair Ltd (PNR.N: Quote).

ADT Caps had earnings before interest, depreciation and amortization of $160 million as of the end of September 2013. The business is expected to fetch around $1.6 billion, based on a ten times EBITDA multiple, the sources said.   Continued...