Apollo Affiliated Funds Enter Security Monitoring

Protection 1, a business and home security company in the United States, announced it has signed definitive agreements to be acquired by funds managed by affiliates of Apollo Global Management, LLC, together with its consolidated subsidiaries, “Apollo”. By partnering with Apollo, one of the world’s largest alternative investment managers, Protection 1 is now even better positioned to command a greater share of the $46 billion security monitoring industry through organic growth and strategic acquisitions, both of which have been core to the company’s solid growth over the past five years.

Funds managed by affiliates of Apollo also announced today the concurrent signing of definitive agreements to acquire Maryland-based ASG Security, which will be combined with Protection 1. The newly created company, which will continue to operate under the Protection 1 brand, enables Apollo to enter the security monitoring industry with a market leader generating a combined $40 million in monthly recurring revenue and total annual revenue well in excess of $500 million. Terms of the transactions, which are expected to close in mid-2015, were not disclosed.

Protection 1 and ASG Security will join forces under the leadership of Protection 1’s Chairman and Chief Executive Officer Timothy J. Whall.

“Apollo is universally respected for recognizing investment opportunities where it can take a lead position and then work collaboratively with the management teams to achieve the greatest potential for the business,” said Whall. “With Apollo’s style of investing, as well as their access to capital, we know this relationship is a great match for Protection 1. At the same time, Protection 1 is coming together with ASG Security, which immediately strengthens our market leading position and creates additional breadth and depth in our operations. ASG has a strong reputation for operational excellence and together our companies will continue to focus on the outstanding customer service for which we are both known.”

“Apollo is delighted to be partnering with Tim Whall and his team to combine two strong businesses and create the industry leading platform in both residential and commercial security monitoring,” said Marc Becker, senior partner at Apollo. “Protection 1 is one of the strongest companies in the industry, with a national footprint, diverse sales channels and an experienced management team with a history of delivering strong financial results while being laser-focused on customer service. We see further opportunity for growth in the industry, and with the greater scale of a combined Protection 1 with ASG, the new company is well-positioned to succeed in a business that we believe offers very compelling expansion and value-creation opportunities.”

“As Apollo enters the security space, ASG Security is excited to be a part of creating a new platform that is well-positioned to become a significant leader in the industry,” said Joe Nuccio, president and CEO of ASG Security. “ASG’s reputation, coupled with our financial and operational strength, will play an important role in the overall company expansion and value-creation opportunities.”

Financing is being provided by Credit Suisse, Barclays, Deutsche Bank, Jefferies and RBC. Paul, Weiss, Rifkind, Wharton & Garrison LLP is acting as legal adviser to Apollo; Latham & Watkins LLP is acting as legal adviser to Protection 1; and Kirkland & Ellis LLP is acting as legal adviser to ASG Security. Morgan Stanley and Raymond James are acting as financial advisors to Protection 1 and Goldman Sachs is acting as financial advisor to ASG Security.

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