HONG KONG (Reuters) – Private equity firm Carlyle Group is planning a sale of South Korean security systems company ADT Caps in what could be the country’s biggest M&A deal in two years, sources with knowledge of the matter said.
Carlyle has enlisted Morgan Stanley to help sell the business, two of the sources said, with another adding the sale process would be launched this year. The sources could not be named because details of the deal aren’t public.
Carlyle declined to comment, while Morgan Stanley had no immediate comment when contacted by Reuters. ADT Caps was not immediately available for comment after regular business hours.
A former unit of Tyco International Inc, ADT Caps offers central monitoring, access control, video surveillance control and other integrated security services and was bought by Carlyle in an auction for $1.93 billion in February 2014.
Affinity Equity Partners, Bain Capital, Carlyle Group, KKR and South Korea’s MBK Partners were among those to submit bids for ADT Caps in 2014, which at the time was one of South Korea’s largest buyouts.
It is not clear how much ADT Caps is valued at now, but industry sources say a private equity firm typically looks for a return of at least twice its initial investment, which means a sale of the business could potentially fetch around $4 billion.
The biggest recent transaction involving private equity in South Korea was in September 2015, when Tesco sold Homeplus for $6.1 billion to a consortium led by MBK Partners.
Reporting by Kane Wu; Additional reporting by Elzio Barreto in Hong Kong and Hyunjoo Jin in Seoul; Editing by Alexander Smith and Mark Potter