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Apollo Muscles Into Big Bank Dealmaking Territory
3 Nov
Summary
- Apollo Global Management provided $9.6 billion in debt commitments.
- Thrive Holdings is acquiring home security provider ADT Inc.
- The deal highlights Apollo's expanding role in large financing.
Apollo Global Management has committed approximately $9.6 billion in debt financing to support Thrive Holdings' acquisition of home security provider ADT Inc. This move signifies Apollo's growing influence in large-scale financial transactions, encroaching on territory previously held by major investment banks.
Thrive Holdings, an entity formed by Joshua Kushner's venture firm, is purchasing ADT for an equity value of about $7.6 billion. The total transaction value, including ADT's existing debt, is approximately $15.3 billion. Apollo's financing includes debt commitments and preferred equity.
This leveraged buyout exemplifies Apollo's capacity to act in roles traditionally reserved for large investment banks. The firm has previously demonstrated this by offering substantial debt deals, such as a $35 billion commitment to Broadcom Inc. Apollo is now positioned to syndicate the $9.6 billion debt to institutional investors.
Credit rating agencies have reacted to the acquisition. S&P Global Ratings indicated that the deal could weaken ADT's credit metrics, potentially leading to a downgrade of its BB rating. Moody's Ratings revised its outlook for ADT from positive to stable, anticipating no change in its Ba3 rating.
