Shares of ADT fell 10 percent in the company’s market debut Friday, giving the home security products maker a valuation of $9.56 billion.
ADT’s return to the public market offered 105 million shares at $14 apiece. The company was previously taken taken private in May 2016 but CEO Timothy Whall told CNBC that ADT’s progress was much faster than expected.
“We hit most of the five-year targets inside of two years,” Whall said on “Squawk on the Street.” “Much better customer satisifaction resulted in greatly improved cash flows to the business.”
Its offering stumbled however, as shares sold below the expected $17 to $19 range. ADT’s shares opened at $12.65 on the New York Stock Exchange and hit a low of $12.50 in early trading. Whall is unfazed, saying he believes the company’s momentum will send the stock higher.
“Performance is all that matters. Put a few quarters under our belts and I think people will like what they see,” Whall said.
Despite the lower valuation, Boca Raton, Florida-based ADT’s listing is likely among the biggest in the initial weeks of 2018.
ADT makes security devices including surveillance cameras and burglar alarms, besides automation products such as digital door locks and thermostats. With some 15 million alarms sold annually, the company is the biggest home monitored security company in North America.
Still, it faces growing competition from smartphone apps and personal devices that help with monitoring. Whall touted the personal customer service of ADT as one of its primary advantages in the internet of things security marketplace.
“Who is going to help you understand internet of things devices in the home, and make sure it stays working for you?” Whall added.
ADT is backed by private equity firm Apollo Global Management, which would own about 85 percent of ADT common stock following the offering. Morgan Stanley, Goldman Sachs, Barclays, Deutsche Bank and RBC were among the top underwriters to the offering.
— Reuters contributed to this report.
Source: Tech CNBC
Home security firm ADT drops 10% in NYSE debut