After initially being placed on the auction block more than two years ago with the separation of UTC into three independent companies, UK-based Chubb Fire & Security has found a new home with APi Group Corporation, a provider of safety, specialty, and industrial services. According to a statement, Chubb, a maker of security and fire safety products that also provides installation and monitoring services, is being sold by its parent company Carrier for a value of $3.1 billion, which comprises $2.9 billion in cash and approximately $200 million of assumed liabilities and other adjustments.
For APi, the deal will take it from being a U.S. centric company to one with a more global footprint and will also effectively double the size of its existing life safety business. Chubb has approximately 13,000 employees globally along with a sales and service network that spans 17 countries and serves more than 1.5 million customers in Europe, Asia-Pacific, and Canada.
“We believe these new regions complement our portfolio and extend the reach of APi’s platform,” APi Co-Chair Sir Martin Franklin said in a press conference announcing the deal. “The strategic rationale here is fairly straightforward: We are acquiring an internationally-recognized brand that has achieved enormous success over a long period of time. The transaction transforms APi into the world-leading life safety business.” APi’s other Co-Chair, James Lillie, said the acquisition will turn the company into a true global enterprise and emphasized that they bought the business to grow it.
“We intend to invest in it as permanent owners – people who view this business as core to our business,” he said. “This isn’t meant to be negative, but… Carrier sold the business because it wasn’t strategic to their core; it is strategic to our core and so, we see a lot of opportunities for cross-selling – adding their products into our mix of products.”
With the aforementioned separation of UTC, Chubb was almost immediately put up for sale, however; the company decided shortly thereafter to put the sale on hold after bids came in below the asking price. Earlier this year, Carrier decided to put Chubb up for sale again and, just two months ago, it was reported that private equity firms Bain Capital and Advent International had formed a consortium with the purpose of acquiring the company.
For its part, Carrier said the sale would enable it to focus on its core businesses and invest the proceeds with its allocation priorities.
“Carrier continually assesses all aspects of our global portfolio to ensure alignment with our strategic business priorities and optimal value for our stakeholders,” Carrier Chairman and CEO Dave Gitlin said in a statement. “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.”
