Dec 22, 2017

Home security firm ADT files for $100 million IPO

Chris Rank/Bloomberg via Getty Images

ADT, a Florida-based home security company owned by Apollo Global Management, has filed for a $100 million IPO (placeholder figure, with Renaissance Capital estimating it could raise $1.5 billion).

Why it matters: This could be private equity's first test case under the new tax regime. For starters: How will Apollo and the IRS determine when the clock begins on carried interest, given that Apollo acquired ADT just last year, but merged it with a pair of smaller companies it acquired in July 2015? Either way, expect Apollo to hold onto more shares than it would have under current tax law, given that even the original purchases came within the new three-year window for carry consideration.

Also: ADT/Apollo may feel new pressure to use proceeds to pay down debt, due to new interest deductibility limits. The company's $296 million net loss for the first nine months of 2017 was driven by $554 million in interest payments (which, in turn, was partially driven by a large dividend Apollo already took).

  • Deal details: ADT plans to trade on the NYSE under ticker ADT, with Morgan Stanley and Goldman Sachs serving as lead managers.
  • Bottom line: "ADT, which traces its roots to the American District Telegraph Co., makes security products ranging from burglar-alarm systems to wireless cameras for homes and businesses. It has worked to position itself as a player in the so-called smart-home market, which aims to connect consumers wirelessly to various household devices." — Maria Armental, WSJ

Go deeper

House Democrats lose appeal to force McGahn testimony

Photo: Alex Wong / Staff

Democrats in the House lost an appeal to force former White House counsel Don McGahn to comply with a subpoena, Politico was the first to report.

Why it matters: McGahn was seen as a crucial witness in the House investigation into whether President Trump tried to obstruct the Mueller inquiry. The U.S. Court of Appeals for the District of Columbia Circuit ruled 2-1 on Friday that it did not have the authority to resolve the dispute between the executive and legislative branches.

The Americans who can't hide from coronavirus

Illustration: Eniola Odetunde/Axios

The stock markets are in bad shape, but for the millions of Americans who aren’t invested in stocks, coronavirus is presenting a far more imminent concern.

Why it matters: Quarantines usually work with at least 90% participation, but many Americans lack the flexibility to work remotely, take a sick day or absorb having schools close.

Go deeperArrow34 mins ago - Health

Wall Street notches worst week for stocks since 2008

Traders work on the floor of the New York Stock Exchange. Photo: Scott Heins/Getty Images

Stocks closed down about 1% on Friday, ending the worst week for Wall Street since the financial crisis.

Why it matters: The stretch of declines came after a spike in coronavirus cases around the world earlier this week. The steep losses prompted questions about the fate of the record-long economic expansion, as well as a rare statement from the Federal Reserve.

Go deeper: The growing coronavirus recession threat