The Wall Street Journal
ADT Corp. agreed to buy Devcon Security for $148.5 million in cash, while also reporting its fiscal third-quarter profit rose 11% as the security-monitoring company logged higher recurring revenue.
Known for its electronic-security systems, ADT was spun off of industrial conglomerate Tyco International Ltd. (TYC) in October. The vast majority of ADT’s revenue is recurring, meaning it comes from existing customers who pay monthly fees for monitoring services. To increase recurring revenue, the company has been broadening its home-management services to include remote-access features such as adjusting thermostats, unlocking doors or keeping tabs on children at home through live video feeds.
The company noted that its acquisition of Devcon includes about 117,000 customer sites with total recurring monthly revenue of roughly $3.6 million. The deal is expected to close early next month.
For the quarter ended June 28, ADT reported a profit of $113 million, or 52 cents a share, versus a year-earlier profit of $102 million, or 43 cents a share. Stripping out one-time items, the per-share profit was 53 cents versus 44 cents.