ADT Caps Co., South Korea's No. 2 security services provider, is seeking to raise up to 400 billion won ($336 million) from private equity firms ahead of its initial public offering in 2022.
Its second-largest shareholder Macquarie Korea Infrastructure Fund plans to sell part of its shares in ADT Caps through the pre-IPO placement, according to investment banking sources on Oct. 6. Morgan Stanley is advising ADT on the pre-IPO share sale.
The funding round will also involve new shares in the company, 62.6% owned by the country's largest mobile carrier SK Telecom Co. and will result in selling about 10% of the company's enlarged share capital to a new investor.
SK Telecom values the securities services arm at over 4 trillion won, above its bigger rival S-1 Corp.'s market capitalization of 3.2 trillion won as of Thursday's close. S-1, a unit of Samsung Group, commands 55% of the country's physical security market, trailed by ADT with about 30%.
Back in 2018, SK Telecom formed a consortium with Macquarie and two other domestic PE firms to acquire ADT Caps from The Carlyle Group for 2.97 trillion won.
Macquarie, Keistone Partners and Daishin Private Equity hold a combined 37.4% stake in the Korean company. Their detailed ownership was not disclosed.
In March of this year, ADT Caps absorbed SK Infosec Co., a cybersecurity company, to expand its business beyond on-call physical security into the cloud infrastructure and digital realms.
"The results of this pre-IPO share sale will show how the market defines the company, either just as a security services provider, or a platform company," a PEF source told Market Insight. He had considered participating in the pre-IPO share deal.
"There are some cautions that its valuation suggested by SK Group is too demanding," he added.