By Stephen Aldred and Denny Thomas
HONG KONG (Reuters) - KKR & Co LP
Billion-dollar buyouts are rare in Asia, but security companies, when they come up for sale, tend to attract much interest from private equity firms as they are valued for their stable revenues.
A sale of ADT Caps, would follow Bain's $3.4 billion purchase of European security firm Securitas Direct in 2011 and Blackstone Group's
Other bidders for ADT Caps include CVC Capital Partners
KKR, Bain, CVC and MBK declined to comment. Tyco and Affinity did not respond to emails seeking comment.
Tyco, a provider of commercial fire and security systems, became a much smaller company after the diversified conglomerate Tyco International split up last year. Its North American home security arm, ADT
ADT Caps had earnings before interest, depreciation and amortization of $160 million as of the end of September 2013. The business is expected to fetch around $1.6 billion, based on a ten times EBITDA multiple, the sources said.
That compares with valuations of around 8 times EBITDA for Securitas Direct and Vivint, they added.
Established in 1971, ADT Caps offers central monitoring, access control, video surveillance control and other integrated security services.
South Korea has also emerged as one of Asia's most active markets for leveraged buyouts this year as banks, attracted by the higher returns that leveraged buyouts bring, have become more willing to lend in a low-rate environment.
South Korea has captured 26.7 percent of market share for Asia, with $6.27 billion of private equity-backed M&A deals. That is ahead of Australia, and second only to China, which has a 35.4 pct market share.
The deals include MBK's agreement to buy ING Groep's
(Additional reporting by Joyce Lee in SEOUL; Editing by Edwina Gibbs)