CVC Considers Buying Verisure as Shares Trade 30% Below IPO Price
Key Facts
Private equity firm CVC is considering a takeover bid for Sweden-listed security group Verisure, according to the Financial Times. The newspaper said the group's shares were trading 30% below their initial public offering price following its listing in October 2025. Verisure began trading on Nasdaq Stockholm on 8 October 2025, according to the company's announcement marking the start of trading. The group set its final offer price at 13.25 euros per share, giving it a market capitalisation of 13.7 billion euros at listing. The potential takeover interest comes as the company reported higher annual recurring revenue and positive free cash flow in the second quarter of 2026.
Verisure's annual recurring revenue reached 3,620 million euros at the end of the second quarter, according to the company's earnings statement for the period. This represented year-on-year growth of 11.9% in constant currencies, including a contribution from the group's operations in Mexico. The company estimated Mexico's contribution to that growth at about 2 percentage points, included in the reported total for recurring revenue. Adjusted operating profit reached 269 million euros in the second quarter, up 13.9% year on year in constant currencies. Adjusted operating profit growth thus exceeded reported annual recurring revenue growth for the same period, according to the earnings figures.
On cash flow and debt, Verisure said it generated free cash flow of 56 million euros in the second quarter. It also reported a reduction in net debt of 72 million euros during the period, alongside the positive free cash flow. By the end of the quarter, the group's leverage had fallen to 2.7 times, according to its earnings statement. The group had identified strengthening its balance sheet as an intended use of the IPO's net proceeds, according to its earlier announcement of the Nasdaq Stockholm listing. The uses announced at the time included refinancing certain existing debts and funding the acquisition of ADT Mexico.
The second-quarter results followed an increase in adjusted operating profit in fiscal 2025, according to Verisure's annual results announcement. Adjusted operating profit reached 953 million euros, up 15.5% year on year in constant currencies during the past fiscal year. In the same results, the group reported cost savings of 80 million euros over the year. Verisure ended the past fiscal year with about 6.2 million customers, up 10.0% year on year, according to its annual report. The group carried out 873 thousand new installations during the same year, an increase of 3.9% year on year, leaving new installation growth below customer growth.
Regarding the principal shareholder, Verisure's chairman told the annual general meeting that Hellman & Friedman looked forward to remaining the group's principal investor. In his address to the meeting, he said: "We consider ourselves long-term investors and look forward to remaining the principal investor in Verisure." On business development, Verisure said it invested about 170 million euros in technology and innovation during 2025. The group disclosed the investment figure in its announcement of a partnership with Ting Labs to expand its services in Europe. The partnership aims to offer advanced technology to prevent electrical fires, with the company expecting commercial rollout of the service in Europe to begin in early 2027.
Verisure's technology agreements also include the continued use of Origin AI's artificial intelligence sensing technology, according to an ADT filing. ADT said in the filing with the U.S. Securities and Exchange Commission that the licence would continue after its acquisition of Origin AI. The commercial agreement between Verisure, ADT and Origin AI includes development services with a minimum value of about 30 million dollars. The development services covered by that amount span 5 years, according to the terms in the same filing. Per-home activation fees are payable in addition to the development services amount under the commercial agreement.
For its 2026 outlook, Verisure reaffirmed in its second-quarter results announcement its target of about 10% annual recurring revenue growth excluding Mexico. It also reaffirmed its target for an adjusted operating profit margin above 26%, as part of the outlook presented alongside the quarterly results. The exclusion of Mexico applies to the recurring revenue growth target, while the overall growth figures reported for the second quarter included a contribution from its operations there. The group retained both targets in its annual outlook in the second-quarter results announcement, which detailed revenue, profit, cash flow and debt performance. Verisure is scheduled to report third-quarter results on 3 November 2026, according to its official financial calendar.