ADT to acquire Red Hawk Fire & Security

BOCA RATON, Fla.—ADT announced it has entered into a definitive agreement to acquire Boca Raton, Fla.-based Red Hawk Fire & Security, a commercial fire, life safety and security services and portfolio company of Comvest Partners, for $317.5 million in cash. Upon completion of the acquisition, ADT said that its business customers will represent 25 percent of total revenue.

“Commercial security is one of the core pillars of ADT's growth strategy and today's announcement marks a significant step in our concerted efforts to expand our commercial business with the critical capabilities and services that our customers expect,” ADT president and incoming CEO, Jim DeVries, said in the announcement. “Red Hawk's exceptional portfolio of commercial fire and security solutions complements ADT's existing commercial business, positioning us to provide a superior customer experience at a local and national level.”

DeVries added, “We are excited to welcome the talented and experienced Red Hawk team to the ADT family while expanding our geographic reach, service capabilities and product offerings. Having long admired Red Hawk, we are confident that combining the strengths of our two companies will allow us to deliver increased value to our customers and shareholders.”

This transaction accelerates ADT's growth in the commercial security market and expands the company's product portfolio with the introduction of commercial fire safety related solutions, and is the latest in a series of strategic acquisitions made over the last year to drive commercial growth and build on ADT's strong foundation of customer service. With the addition of Red Hawk, ADT will also have an increased geographic footprint and enhanced customer service capabilities across the nation.

“We are delighted to join a company with ADT's resources, growth potential and shared commitment to providing high quality customer service and innovative solutions to customers,” Red Hawk president and CEO Michael McWilliams said in a prepared statement. “We look forward to our future with ADT, which we are confident will help us to achieve our next phase of growth.”

Red Hawk specializes in the design, installation, integration, monitoring and servicing of commercial fire, security and life safety solutions, and “represents one of the few last independent large national commercial integrators, offering complex, mission-critical solutions across its 45 district locations and is expected to generate approximately $300 million of revenues in 2018,” the press release reads. “In recent years, Red Hawk has demonstrated double-digit revenue growth across a diverse set of customers, markets and geographies, leveraging its strong local presence backed by its nationwide footprint and differentiated fire and security expertise.”

Roger Marrero, the managing partner of Comvest Partners, said in a prepared statement, “It was a rewarding and collaborative experience working with Michael McWilliams, Mark Foley, Red Hawk's CFO, and the other members of Red Hawk's senior management team to build Red Hawk into a market leader from our original acquisition, and Red Hawk is positioned to continue to thrive under ADT's leadership.”

The completion of the transaction is subject to customary closing conditions, including regulatory approvals, and is expected to close by the end of the fourth quarter 2018.

Financing is being provided by Barclays, Citigroup Global Markets Inc., Citizens Bank, Deutsche Bank and RBC Capital Markets, as well as Credit Suisse, Goldman Sachs and Morgan Stanley. Raymond James is serving as financial advisor to ADT, and Jefferies and Lincoln International are serving as financial advisors to Red Hawk. McDermott Will & Emery LLP is acting as legal advisor to Red Hawk. Morgan, Lewis & Bockius LLP and Paul, Weiss, Rifkind, Wharton & Garrison LLP are acting as legal advisors to ADT.