Intelligent Monitoring to acquire ADT UK Residential in £180 million UK security market entry Proactive uses images sourced from Shutterstock
Intelligent Monitoring Group Ltd (ASX:IMB, OTC:THRTF, FRA:8YM) has entered a binding agreement to acquire ADT’s residential security business in the United Kingdom for £180 million (AU$347,094), marking a major international expansion and a substantial uplift in recurring revenue.
The acquisition of ADT UK Residential from a subsidiary of Johnson Controls International PLC (NYSE:JCI) will be funded through £155 million in cash and £25 million in IMG shares, subject to customary completion adjustments.
The deal gives IMG an immediate foothold in one of the world’s largest monitored security markets through one of the UK’s most established and recognised residential security brands.
Acquisition adds scale and recurring revenue
ADT UK Residential brings more than 160,000 direct residential security customers to IMG and is expected to add $12.5 million per month in recurring revenue, representing a 205% increase in IMG’s monthly recurring monitoring revenue.
The acquisition is expected to increase IMG’s pro forma annualised EBITDA to A$130 million, compared with FY26 guidance of A$43 million to A$47 million, and deliver an estimated 40% uplift to pro forma earnings per share.
Once complete, ADT UK Residential is expected to continue operating as a standalone business, with IMG planning an orderly transition under its established operating model.
Funding structure avoids a new external equity raise
IMG said the acquisition would be funded through a combination of a new debt facility and a vendor equity placement, with no requirement for additional external equity capital beyond the consideration shares.
The company has entered binding commitment papers to refinance its current facilities with a four-year $448 million Unitranche facility provided by Ares Capital Corporation, split between £155 million and A$150 million.
IMG expects pro forma leverage of about 3.1 times net debt to pro forma FY26 EBITDA following completion.
Rationale builds on ADT experience
The acquisition aligns with its strategy of acquiring high-quality security businesses with strong customer relationships and established market positions.
The company sees ADT UK Residential as a platform for future growth, including the rollout of advanced monitoring and video security solutions.
Managing director Dennison Hambling said the transaction represented “a compelling opportunity” to add a recognised residential security platform supported by long-standing customer relationships.
“Following the acquisition of ADT’s businesses in Australia and New Zealand in 2023, IMG has developed a unique understanding of ADT’s operating model and brand,” Hambling said.
“This experience underpins our confidence in both the quality of the asset and IMG’s ability to effectively integrate, operate and grow the business.”
What happens next
Completion of the acquisition remains subject to customary conditions, including regulatory approvals and IMG shareholder approval.
Black Crane Asia Pacific Opportunities Fund, which holds about 29.3% of IMG, has indicated it intends to vote in favour of issuing the consideration shares, subject to no superior proposal emerging.
The acquisition is expected to be finalised in the first half of 2027.