U.S. Markets close in 4 hrs 49 mins
  • S&P 500

    3,620.96
    +43.37 (+1.21%)
     
  • Dow 30

    29,956.78
    +365.51 (+1.24%)
     
  • Nasdaq

    11,988.42
    +107.79 (+0.91%)
     
  • Russell 2000

    1,848.29
    +30.00 (+1.65%)
     
  • Crude Oil

    44.80
    +1.74 (+4.04%)
     
  • Gold

    1,803.00
    -34.80 (-1.89%)
     
  • Silver

    23.21
    -0.42 (-1.79%)
     
  • EUR/USD

    1.1878
    +0.0032 (+0.2732%)
     
  • 10-Yr Bond

    0.8770
    +0.0200 (+2.33%)
     
  • Vix

    22.13
    -0.53 (-2.34%)
     
  • GBP/USD

    1.3353
    +0.0030 (+0.2283%)
     
  • USD/JPY

    104.6560
    +0.1680 (+0.1608%)
     
  • BTC-USD

    19,317.64
    +865.68 (+4.69%)
     
  • CMC Crypto 200

    383.17
    +13.42 (+3.63%)
     
  • FTSE 100

    6,415.39
    +81.55 (+1.29%)
     
  • Nikkei 225

    26,165.59
    +638.22 (+2.50%)
     

ADT Completes Acquisition of Independent Dealer Defenders

Zacks Equity Research

ADT Inc. ADT recently announced the closure of the buyout of its major independent dealer, Defenders.

The deal, worth about $381 million in total consideration, includes an offering of around 16.3 million shares of ADT’s common stock to Defenders’ founder, David Lindsey and Jessica Lindsey, in exchange for 100% of their ownership in the acquired company. Additionally, ADT paid another $260 million in cash to settle the current debt of Defenders, fund liabilities and transaction costs. As noted, the overall value of the deal is based on ADT stock’s closing price of $7.45 on Jan 3.

Based in Indianapolis, Defenders has long been ADT’s independent dealer, with annual sales of more than $600 million. Notably, the company employs around 2,900 employees in more than 130 field branch sites.

Acquisition Rationale

The acquisition is in sync with the company’s strategy of driving profitable growth over the long term. Notably, the buyout will allow ADT to create a simplified and unique platform, with enhanced marketing efficiency. Moreover, the deal will enable ADT to offer a complete suite of advanced home automation and security products to a larger customer base.

The company also anticipates an enhanced revenue payback period along with reduced costs for subscriber acquisition and new account gains from the combined ecosystem optimization. Further, the transaction is likely to bring in increased capital efficiency for the company in 2020.

Zacks Rank & Price Performance

ADT, which has a market cap of roughly $5.5 billion, currently carries a Zacks Rank #3 (Hold). In the past three months, the company’s shares have returned 19.4% compared with the industry’s growth of 6.4%.

Analysts have become increasingly bearish about the company over the past 60 days. The company’s earnings estimates for fourth-quarter 2019 have decreased from 22 cents to 21 cents on account of one downward estimate revision versus none upward.

Stocks to Consider

Some better-ranked stocks from the Zacks Industrial Products sector are Intellicheck, Inc. IDN, Cintas Corporation CTAS and DXP Enterprises, Inc. DXPE. While Intellicheck sports a Zacks Rank #1 (Strong Buy), Cintas and DXP Enterprises carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Intellicheck delivered average positive earnings surprise of 4.76% in the trailing four quarters.

Cintas pulled off average positive earnings surprise of 8.50% in the trailing four quarters.

DXP Enterprises delivered average positive earnings surprise of 17.67% in the trailing four quarters.

Just Released: Zacks’ 7 Best Stocks for Today

Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.6% per year.

These 7 were selected because of their superior potential for immediate breakout.

See these time-sensitive tickers now >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Cintas Corporation (CTAS) : Free Stock Analysis Report
 
DXP Enterprises, Inc. (DXPE) : Free Stock Analysis Report
 
ADT Inc. (ADT) : Free Stock Analysis Report
 
Intellicheck Mobilisa, Inc. (IDN) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research