SEOUL, May 8 (Korea Bizwire) — South Korea’s top mobile carrier SK Telecom Co. on Tuesday acquired stakes in ADT Caps Co., a security service provider, in a joint investment with Australia-based Macquarie Group.
Under the deal estimated at 1.27 trillion won (US$1.17 billion), SK Telecom will hold a 55 percent stake in ADT Caps, with Macquarie holding the remaining 45 percent. The two companies will purchase shares from Siren Holdings Korea, which currently owns ADT Caps.
The investment made by SK Telecom is estimated at 702 billion won.
ADT Caps, meanwhile, also holds debt worth 1.7 trillion won, bringing the overall size of the purchase to 2.9 trillion won.
In its regulatory filing, SK Telecom said it aims to beef up its security business by purchasing a majority stake in ADT Caps.
SK Telecom said the 2.9 trillion-won estimate is around 11 times the size of ADT Cap’s earnings before interest, taxes, depreciation and amortization, which falls in line with the global average in the acquisition of security firms.
ADT Caps is South Korea’s No. 2 security service provider with 570,000 clients and is focused on maintaining and protecting various facilities, businesses and homes.
SK Telecom said ADT Caps’ market share here stands at 30 percent, with its operating profit reaching 143.5 billion won in 2017, along with sales of 721.8 billion won.
The mobile carrier said global IT giants, including Google and Amazon, are also jumping into the industry, claiming the segment will become a new growth engine for SK Telecom as well.
The company said its technology know-how in artificial intelligence, Internet of Things and big data will help ADT Caps offer more reliable services and become a next-generation security service provider.
Potential services to be provided by ADT Caps in the future is a surveillance system that can automatically deal with emergency situations, including fires, without having to only rely on people at the site.
SK Telecom said the cooperation between the two will also speed up the development of new industries, including drones and cameras.
“Next-generation security services based on the new ICT can be considered a blue ocean market and a new growth engine,” the company said, claiming it will have ADT Caps post sales of 1 trillion won annually by 2021.