Red ink, hefty debt: Five things to know about ADT’s IPO

4:54 p.m Wednesday, Dec. 27, 2017 Business

A year after it went private, security company ADT wants to go public again. The Boca Raton-based firm has asked securities regulators for permission for an initial public offering in 2018. Among the nuggets from its filing:

ADT is a huge player. The company has more than 7 million customers, and ADT says it’s “five times larger than the next residential competitor. Revenue topped $3 billion for the first nine months of 2017.

Profits are elusive. ADT lost $296 million in the first nine months of 2017 and $452 million in the first nine months of 2016.

It’s not your imagination – they’re selling hard. “We rely on telemarketing, email marketing, door-to-door sales, and other marketing methods conducted internally and through third parties to generate a substantial number of leads for our business,” ADT says. Tougher rules about telemarketing might hinder the company’s ability to drum up business.

Cops don’t always respond to alarms. “Police departments in certain U.S. and Canadian jurisdictions do not respond to calls from monitored security service companies unless certain conditions are met, such as video or other verification or eyewitness accounts of suspicious activities, either as a matter of policy or by local ordinance,” ADT says. “As an alternative to video cameras in some jurisdictions, we have offered affected customers the option of receiving response from private guard companies, at least as an initial means to verify suspicious activities.”

The balance sheet shows “substantial” debt. The company carried $10.4 billion in debt as of Sept. 30. ADT expected servicing that debt to cost $650 million for 2017

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