Security and protection services provider
The ADT Corporation
) recently announced a debt offering of $1 billion worth of
senior unsecured notes due 2021. In accordance to Rule 144A, the
notes will be offered and sold to qualified institutional buyers
in the U.S.
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ADT intends to utilize the proceeds from the offering to increase
its liquidity and repay $150 million debt under its revolving
credit facility. In addition, the company is likely to use the
proceeds to fund its share repurchase program and for general
corporate purposes like acquisitions.
In Nov 2012, ADT approved a $2 billion share repurchase program
over a three-year period, pursuant to which 10.6 million shares
were purchased in the open market for $43.74 each during the nine
months ended Jun 28, 2013. The company also entered into a
separate accelerated share repurchase agreement in Jan 2013,
under which it repurchased 12.6 million shares for $600 million
at an average price of $47.60 per share. Funded with proceeds
from the Jan 2013 debt offering, this accelerated share
repurchase program was completed in April.
In a separate development, ADT maintained its quarterly dividend
of 12.5 cents per share. Over the years, ADT has consistently
returned significant cash to its shareholders through dividends
and share repurchases. The dividend is payable in cash on Nov 20
to shareholders of record as of Oct 30. Based on the closing
price of $42.88 on Sep 23, 2013, the dividend offers a yield of
1.2%. Steady dividend payout is also part of the long-term
strategy of ADT to provide attractive risk-adjusted returns to
Headquartered in Boca Raton, Flo., ADT offers electronic security
products along with interactive home, business automation and
monitoring services for residences and small businesses in the
U.S. and Canada.
ADT has a Zacks Rank #2 (Buy). Other notable companies in the
industry that warrant a look include
Corporate Executive Board Co.
McGraw Hill Financial, Inc.
The Hackett Group, Inc.
), each carrying a Zacks Rank #2 (Buy).