Security and protection services provider
The ADT Corporation
) recently inked an agreement with employee-owned hedge fund
sponsor Corvex Management LP to repurchase 10.24 million shares
beneficially owned by it. The purchase price for each share is
fixed at $44.01, which equates to the closing price of ADT on Nov
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The share repurchases are in sync with ADT's accelerated share
repurchase program, under which it intend to acquire
approximately $400 million worth of its common stock. Between the
shares already repurchased through open market transaction and
the accelerated share repurchase program, the company expects to
complete the $2 billion share repurchase program in the first
half of fiscal 2014. As a result, the company has increased the
current share repurchase authorization by an additional $1.0
Over the years, ADT has consistently returned significant cash to
its shareholders through dividends and share repurchases. In
concurrence with the fourth quarter fiscal 2013 earnings release,
the company authorized a 60% increase in quarterly dividend to 20
cents per share, beginning with the next dividend declaration.
With the recent share repurchase from Corvex, ADT has
cumulatively spent $2.4 billion on share repurchases and retired
over 20% of its shares since its inception.
Headquartered in Boca Raton, Fla., 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. The company has a strong balance sheet and a
talented management team with more than 6.5 million customers.
ADT presently carries a Zacks Rank #3 (Hold). Other notable
companies in the industry that warrant a look include
Corporate Executive Board Co.
McGraw Hill Financial, Inc.
Navigant Consulting Inc.
), each carrying a Zacks Rank #2 (Buy).