Security Stocks Seeing Some Interest Following ADT Deal

Security stocks were trading mostly higher on Tuesday after ADT Corp (NYSE: ADT) confirmed it will sell itself to an affiliate of certain funds managed by Apollo Global Management LLC (NYSE: APO) for $42.00 per share.

ADT's stock closed at $26.87 on Friday, implying the company sold itself for a more than 50 percent premium.

"This transaction represents a highly attractive premium for ADT's shareholders," said Naren Gursahaney, President and CEO of ADT. "We're proud to have strengthened the quality of our customer base, improved service and retention, and extended our leadership in innovative solutions such as our ADT Pulse platform and our new Security-as-a-Service offering, ADT Canopy. By combining Protection 1 with ADT, we will be better positioned to expand the breadth and depth of the services we offer to our customers throughout the United States and Canada."

The large premium that Apollo Global paid for ADT prompted investors and traders to buy other security-related names on Tuesday. ADT's closest peer, Ascent Capital Group Inc (NASDAQ: ASCMA), a provider of security alarm monitoring and related services, surged higher by 37 percent.

While not a direct competitor, shares of Brink's Company (NYSE: BCO) were higher by more than 1 percent on Tuesday.