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Apollo Global Will Buy ADT for $7 Billion

February 16, 2016, 12:37 PM UTC
An ADT Security sign sits out in front of a home in Sandy Sp
UNITED STATES - MAY 11: An ADT Security sign sits out in front of a home in Sandy Springs, Georgia Friday, May 11, 2007. Tyco bondholder American International Group Inc. this week sued the owner of ADT security systems in an effort to block it from buying back $6.6 billion of debt as part of a plan to split into three companies. (Photo by Chris Rank/Bloomberg via Getty Images)
Photograph by Chris Rank — Bloomberg/Getty Images

Electronic security services provider ADT (ADT) said it had agreed to be acquired by funds affiliated with private equity firm Apollo Global Management for $7 billion.

ADT shares rose 52% to $40.88 in pre-market trading on Tuesday, just shy of the cash offer price of $42.

After the transaction closes, Apollo will merge ADT with its home security company Protection 1 in a deal valued at about $15 billion.

The offer price represents a premium of about 56% to ADT’s Friday close.

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The combined company, to be headquartered in Boca Raton in Florida, will have proforma annual revenue of more than $4.2 billion. Apollo acquired Protection 1 in 2015.

ADT, spun off from fire safety and security systems maker Tyco International (TYC) in 2012, had 166 million shares outstanding as of Dec. 31.

Barclays, Citigroup Global Markets, Deutsche Bank, Royal Bank of Canada, and PSP Investments Credit USA are providing the financing for the deal.

BofA Merrill Lynch and Goldman Sachs are ADT’s financial adviser for the transaction and Barclays, Citigroup Global Markets, Deutsche Bank, and RBC Capital Markets advised Protection 1.

Simpson Thacher & Bartlett are ADT’s legal adviser, while Paul, Weiss, Rifkind, Wharton & Garrison advised Protection 1 and Apollo.

(Reporting by Ankit Ajmera in Bengaluru; Editing by Kirti Pandey)