What's going on?

Investment firm�Apollo Global Management has agreed to buy ADT, the home-security company, for almost $7 billion. It shows that acquisitions continue, despite recent market troubles.

What does this mean?

Interestingly, Apollo will be funding the deal by issuing almost $5 billion of debt. Investors that lend the money to Apollo are taking on relatively risky debt (versus say, debt from Apple or another very large company). That�s the sort of risky debt that investors might be expected to shy away from given the recent market turbulence. �So, it�s good news for markets that such a transaction can, apparently, get done in such a challenging environment.

Why should I care?

The bigger picture:(Some) M&A is still getting done. Last year was the biggest year ever for mergers and acquisitions (a.k.a. companies buying or merging with one another). 2016 has started with a relative whimper, but this is the third major deal after Shire buying Baxalta and ChemChina buying Syngenta. It�s good news for banks and other firms that profit from such deals getting done, as well as a moderately positive sentiment indicator for the overall stock market (deal making tends to be good for stocks… just ask ADT�s shareholders).

For the stocks: ADT stock soared. Apollo agreed to pay 56% more than Friday�s closing price. Apollo itself is a public company and its stock lost almost half its value last year. That prompted Apollo to announce a few weeks ago that it would buyback a chunk of its own stock, as it believed it was fundamentally undervalued (partly because deals such as this had become more difficult to put together). Apollo�s stock was up slightly on the ADT news (and is up more than 30% since its low in January).