Electronic security services provider ADT said it had agreed to be acquired by funds affiliated with private equity firm Apollo Global Management for $7 billion.
ADT shares rose 52 percent to $40.88 in premarket trading on Tuesday, just shy of the cash offer price of $42.
After the transaction closes, Apollo will merge ADT with its home security company Protection 1 in a deal valued at about $15 billion.
The offer price represents a premium of about 56 percent to ADT's Friday close.
The combined company, to be headquartered in Boca Raton in Florida, will have proforma annual revenue of more than $4.2 billion. Apollo acquired Protection 1 in 2015.
ADT, spun off from fire safety and security systems maker Tyco International in 2012, had 166 million shares outstanding as of Dec. 31.
Barclays, Citigroup Global Markets, Deutsche Bank, Royal Bank of Canada and PSP Investments Credit USA are providing the financing for the deal.
BofA Merrill Lynch and Goldman Sachs are ADT's financial adviser for the transaction and Barclays, Citigroup Global Markets, Deutsche Bank and RBC Capital Markets advised Protection 1.
Simpson Thacher & Bartlett are ADT's legal adviser, while Paul, Weiss, Rifkind, Wharton & Garrison advised Protection 1 and Apollo.