September 13, 2017 / 11:20 AM / a year ago

Carlyle to sell South Korean security firm ADT Caps - sources

HONG KONG, Sept 13 (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, one of the sources said, with another adding that the sale process could begin in the coming weeks. Carlyle, Morgan Stanley and ADT Caps were not immediately available for comment.

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 who submitted 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 their 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)

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