APi Group agrees to US$3.1b takeover of Carrier's Chubb

[ZURICH] APi Group agreed to buy Carrier Global's Chubb fire-safety and security unit in a deal valuing the business at US$3.1 billion including debt.

The transaction was announced in statements on Tuesday that confirmed an earlier Bloomberg News report. As part of the deal, APi will receive an US$800 million investment from Blackstone Group and Viking Global Investors in the form of perpetual preferred equity.

Chubb makes products such as burglar alarms and fire extinguishers. Carrier, which was spun off from United Technologies last year, is selling the company to focus on its core businesses including air conditioners, heating systems and refrigeration. Carrier's global fire and security products business is not part of the Chubb sale and will remain part of its intelligent building strategy, it said in Tuesday's statement.

US-based industrials group APi was bought in 2019 by J2 Acquisition, an investment vehicle backed by serial dealmaker Martin E Franklin. At the time, Mr Franklin said he'd look to grow APi by making larger acquisitions than it had done previously.

"The acquisition of Chubb transforms APi into the world's leading life safety services provider," Mr Franklin said in a statement. "We believe the transaction will be highly accretive with significant synergy opportunities."

Chubb traces its roots back to around 1818, when brothers Charles and Jeremiah Chubb invented the so-called detector lock, the first secure lock mechanism. The company operates in more than 20 countries, according to its website. Headquartered in the UK, Chubb has about 13,000 employees globally and generated revenue of around US$2.2 billion for the 12 months through March 31.

A previous attempt to offload Chubb was halted in 2019 when bids came in too low. The most recent sale process drew interest from buyout firms including Blackstone and CVC Capital Partners.

BLOOMBERG