Chubb Fire & Security sells for $3.1 billion

New Brighton, Mn, Palm Beach Gardens, Fl (USA) and London, UK

API Group is set to acquire Chubb in the UK for $3.1 billion, comprised of $2.9 billion cash and approximately $200 million of assumed liabilities and other adjustments.

Carrier Global Corporation has agreed to sell its Chubb fire and security business to API Group Corporation for an enterprise value of $3.1 billion, which is comprised of $2.9 billion cash and approximately $200 million of assumed liabilities and other adjustments.

The sale enables Carrier to focus on its core businesses and to re-allocate net proceeds consistent with its stated capital allocation priorities, including funding organic and inorganic growth, dividends, and share repurchases within a solid investment grade credit rating.

Headquartered in the United Kingdom, Chubb has approximately 13,000 employees globally and a sales and service network spanning 17 countries in Europe, Asia Pacific and Canada. The business is a globally recognised fire safety and security provider, offering customers complete and reliable services from design and installation to monitoring and ongoing maintenance.

Carrier's global fire and security products business is not part of this transaction and remains an important part of Carrier's portfolio and its healthy, safe, sustainable and intelligent building strategy.

"Carrier continually assesses all aspects of our global portfolio to ensure alignment with our strategic business priorities and optimal value for our stakeholders," said Carrier Chairman & CEO Dave Gitlin. "This transaction drives greater focus for Carrier and allows us to re-allocate proceeds from the divestiture toward our higher strategic imperatives. It also provides Chubb the opportunity to unlock new potential, building on its history and dedication to customer service excellence, its 200-year brand legacy and highly skilled network of global service providers and technicians. We look forward to seeing the growth potential Chubb will have under the ownership of API Group."

Russ Becker, API’s President and Chief Executive Officer stated: “This is a very exciting day in the history of API. We have spent a tremendous amount of time evaluating several transformative opportunities as well as more traditional acquisitions. With the acquisition of Chubb, we see a tremendous amount of accelerated organic growth and margin expansion opportunities across our combined platform. There is also significant opportunity to leverage Chubb’s 200+ year history of providing statutorily required and route-based services through its internationally recognised brand...”

API Co-Chair James E. Lillie added: “This acquisition meets all of our previously stated, key strategic investment criteria. Chubb has a history of strong free cash flow generation, they are leaders in their niche markets and have an experienced leadership team. The acquisition strengthens our strategic platform and expands our geographical reach as the combined entity will have market-leading positions in key geographies. Importantly, 50%+ of our revenue will be service based with meaningful, statutorily-required, recurring revenue. We believe there is significant future value creation potential both through organic growth opportunities, as well as through continued incremental transformational and bolt-on M&A.

We are delighted to welcome a combined $800 million investment in perpetual preferred equity from Blackstone and Viking Global Investors. Blackstone has a significant global property portfolio, which as our partner we expect to provide the combined company the opportunity to open new customer relationships in multiple markets.”

David Blitzer, Global Head of Blackstone Tactical Opportunities, said : “We are excited to partner with the API team by investing in this highly strategic transaction. We believe the combined companies will be well positioned for long-term success and look forward to supporting their vision to create a global market leader.”

For the trailing twelve-month period ended March 31, 2021, Chubb had revenue of approximately $2.2 billion and adjusted EBITDA of approximately $213 million. The transaction is expected to close around year-end 2021 and is subject to a consultation process and standard regulatory approvals. It will be funded through a combination of cash on hand, perpetual preferred equity financing, and debt.


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