Protection 1 takes in additional tenders of three series of ADT notes

New York, April 29 – Prime Security Services Borrower, LLC, or Protection 1 announced that it took in a small number of additional tenders for three series of notes issued by ADT Corp.

As of the expiration of the tender at midnight ET on April 28, holders had tendered the following amounts:

• $666,734,000, or 88.90%, of the $750 million of 2¼% notes due 2017. That response was up from $664,351,000 principal amount, or 88.6%, as of the early deadline;

• $452,573,000, or 90.51%, of the $500 million of 4 1/8% senior notes due 2019. That response was up from $443,599,000 principal amount, or 88.7%, as of the early deadline; and

• $718,354,000, or 95.78%, of the $750 million of 4 7/8% notes due 2042. That response was up from $701,947,000 principal amount, or 93.6%, as of the early deadline.

The early tender deadline was 5 p.m. ET on April 14.

The 2017 notes and 2019 notes are covered by tenders. The total purchase price for each $1,000 principal amount will be $1,015.67 for the 2017 notes and $1,079.18 for the 2019 notes, which includes an early tender premium of $5.00 per $1,000 principal amount of notes tendered by the early deadline.

Holders who tender after the early deadline will receive the total amount less the early premium, or $1,010.67 per $1,000 of 2017 notes and $1,074.18 per $1,000 of 2019 notes.

The 2042 notes are the subject of an exchange in which holders will receive $1,000 principal amount of new exchange notes for each $1,000 principal amount of existing 2042 notes tendered for exchange by the early deadline. The exchange value includes an early exchange premium of $5.00 of exchange notes per $1,000 principal amount.

Holders who tender for exchange after the early deadline will receive $995 principal amount of exchange notes per $1,000 principal amount of 2042 notes.

The exchange notes will be identical to the existing 2042 notes except that they will mature in 2032 and they will benefit from guarantees, security interests and a reporting covenant. Also, the exchange notes will have provisions mirroring the proposed amendments.

As a result, the acquisition will not constitute a change-of-control under the exchange notes.

The tenders and exchange, carried out by Protection 1’s wholly owned subsidiary, Prime Security One MS, Inc., was one of a series of transactions relating to notes issued by ADT.

The consent solicitations, tender offers and exchange offer are being made in connection with and conditioned on the acquisition of ADT by Protection 1.

Consent solicitations

On April 25, Protection 1 said it obtained the needed consents to amend the 6¼% senior notes due 2021 issued by ADT Corp.

ADT and Protection 1 entered into a supplemental indenture implementing the waiver and amendments, which will become effective when the consent fee is paid in connection with the planned acquisition, according to a company update.

The consent solicitation for the 6¼% notes ended at 5 p.m. ET on April 22, extended a few times.

ADT had previously obtained consents for 49.9% of the 2021 notes as of 5 p.m. ET on April 13, the previous consent deadline, and 49.8% of the 2021 notes as of noon ET on April 12. The consent solicitation was originally set to expire at 5 p.m. ET on April 7.

The company was also soliciting consents from holders of its outstanding $300 million 5¼% senior notes due 2020, $1 billion 6¼% senior notes due 2021, $1 billion 3½% notes due 2022, $700 million 4 1/8% senior notes due 2023 and $750 million 4 7/8% notes due 2042.

ADT said on April 12 that it had received the needed consents to amend the terms of those notes and extended the bid for the 6¼% notes.

In order to amend the notes, the company needed to garner consents from holders of a majority of the notes.

The consent fee for each $1,000 principal amount is $2.50 for the 2020 and 2021 notes, $5.00 for the 2022 and 2023 notes and $1.00 for the 2042 notes.

ADT was seeking consents from holders of the five series of notes for a waiver of any potential change-of-control triggering event, including any potential obligation of ADT to make a change-of-control offer, as well as amendments to the indentures governing each note series. The amendments would modify the definition of change of control and limit any required grant of capital stock as collateral for the notes, in each case in connection with the acquisition.

Protection 1 does not expect that it will be required to make change-of-control offers in connection with the acquisition. However, Protection 1 has obtained financing commitments to finance the acquisition if any of the five series of notes must be repaid or repurchased as a result of a change of control.

More details

The solicitations and offers are not conditions to the acquisition being completed. Also, each of the consent solicitations, tender offers and the exchange offer is not contingent on completion of the other transactions.

The acquisition is expected to close by June.

Deutsche Bank Securities Inc. is the solicitation agent for the consent solicitations and dealer manager for the tender offers and exchange offer. Barclays, Citigroup Global Markets Inc. and RBC Capital Markets, LLC are co-solicitation agents for the consent solicitations and co-dealer managers for the tender offers and exchange offer.

D.F. King & Co. Inc. (212 269-5550 for brokers and banks, 866 416-0576 for all others, adt@dfking.com) is the tender and information agent.

ADT is a Boca Raton, Fla.-based provider of security and automation solutions. Protection 1 is also a security company and is based in Chicago. Following the acquisition, the combined company’s key brands will be ADT and ADT Pulse, with the Protection One brand being maintained in select channels.

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