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ADT Corp. agreed to be acquired by private-equity firm Apollo Global Management LLC in a deal that values the home-security company at about $6.93 billion, the latest sign market volatilityhasn’t brought deal making to a halt. The Wall Street Journal reported Monday that the firms were in talks and that a deal could be reported as soon as Tuesday. The all-cash price tag of $42 a share represents a 56% premium over Friday’s closing price. ADT will fold into Apollo’s Protection 1 subsidiary, an ADT competitor Apollo bought last year in a move into the alarm monitoring services industry. “Protection 1’s robust commercial presence will speed ADT’s expansion into the commercial sector,” said Timothy Whall, Chief Executive of Protection 1. Mr. Whall will lead the combined business upon the deal’s completion, expected by June.ADT, an offshoot of the former Tyco conglomerate, makes security products for residential customers and businesses, ranging from burglary alarm systems to wireless cameras and video surveillance. It has worked to position itself as a player in the so-called smart-home market, which aims to connect consumers wirelessly to various household devices. The company’s stock is down 30% in the past year, in part as a result of a broader downturn sparked by fears of slowing economic growth, among other factors. The transaction represents one of the biggest leveraged buyouts in recent years. ADT has more than $5 billion in debt, according to S&P Global Market Intelligence, and a so-called enterprise value of close to $10 billion.Apollo, based in New York, was founded by veterans of junk-bond pioneer Drexel Burnham Lambert. The firm is known for its willingness to make aggressive, sometimes contrarian, bets. The firm has been acquisitive as of late as many rivals have sat on the sidelines of the LBO market. Just this month, Apollo signed a deal to buy struggling education company Apollo Education Group Inc.—with which it is unaffiliated—for around $1.1 billion. The deal also signals that market volatility hasn’t derailed the merger market. Despite choppy equity, debt and other markets this year, activity so far in 2016 has been surprisingly robust in the wake of the record activity notched in 2015, when companies struck nearly $5 trillion of mergers. Other tie-ups this year include China National Chemical Corp.’s $43 billion deal for agricultural-products providerSyngenta AG and Shire PLC’s $32 billion planned purchase of BaxaltaInc. The companies said the combined company will generate $318 million in monthly revenue and total annual sales of at least $4.2 billion. In its most recent fiscal year, ADT posted $3.57 billion in revenue, up 4.9% from the previous year. Apollo said Tuesday that it would finance the deal through $4.7 billion in new debt and the issuance of $750 million in preferred securities. The merger agreement includes a “go-shop” period, during which ADT may actively solicit and consider alternative proposals. Barclays, Citigroup Global Markets, Deutsche Bank and RBC Capital Markets are serving as financial advisers to Protection 1. Goldman Sachs is serving as lead financial adviser to ADT, while BofA Merrill Lynch also is serving as financial adviser to ADT. ADT shares jumped 53% to $41.22 in premarket trading, while Apollo’s stock slipped 4.9% to $12.75.

TOKYO—Faced with sluggish domestic growth, Japan’s megabanks are expanding their role in financing global mergers and acquisitions, which hit a record level this year. Japanese banks have long ranked among the world’s top cross-border lenders, and have lent many billions of dollars to Japanese companies also seeking growth abroad through acquisitions. Now the banks are increasingly financing deals that don't involve their compatriot companies. Banks in Japan have had a hand in 59% of global M&A loan packages this year, up from 46% last year and a longtime high, according to data provider Dealogic. That means they have contributed at least a piece of $473 billion worth of global M&A financing such as syndicated loans, the data show. Japanese lenders have helped finance some of the year’s biggest deals. They included Anheuser-Busch InBev’s $104 billion acquisition of SABMiller, announced in October. The country’s top three banks— Mitsubishi UFJ Financial Group Inc., Mizuho Financial Group and Sumitomo Mitsui Financial Group—said they provided about $4 billion each to a $75 billion loan package for that deal. That represents only a fraction of the big three’s total overseas lending. The balance of Mitsubishi UFJ’s overseas lending totaled ¥42.4 trillion ($352 billion) as of Sept. 30, while Mizuho’s was ¥22.6 trillion and SMFG’s was ¥20.5 trillion. The banks don’t disclose the exact amounts of their contributions to M&A loan packages. Still, efforts to ramp up overseas M&A lending are a positive for Japanese banks, said Akira Takai, an analyst at Daiwa Securities,who noted that the money is mostly going to blue-chip companies with higher investment grades. “As dollar funding costs rise, financing for deals is more profitable than normal lending,” he said. With its financial strength, Mitsubishi UFJ, Japan’s largest bank by assets, sees an opportunity to move well beyond financing acquisitions by Japanese companies, said Makoto Kobayashi, head of the banking unit’s financial solutions group. “We’ve seen increasing number of financing deals for non-Japanese M&A activities this year and I feel our presence has been more recognized,” Mr. Kobayashi said. The bank’s alliance with Morgan Stanley has helped it expand its role in global deal financing, Mr. Kobayashi said. The Japanese bank took a 20% stake in Morgan Stanley in 2008, and the two have joint ventures in Japan. “In global deals that Morgan Stanley advises, we get financing even if they [the companies] are not Japan-related,” he said. M&A financing on a global scale presents some challenges for banks more accustomed to working with well-known partners. Takahiko Yasuhara, general manager of the international coordination division at Mizuho Financial Group, said Mizuho works to get to know the biggest companies in regions around the world so it won’t be caught by flat-footed if a deal is struck. “We are often asked by an acquiring company to provide financing for an upcoming deal Friday and to get back to them with a yes or no over the weekend. So to make a quick decision, we have to build close relationships with such companies,” he said. Mizuho contributed to $34 billion in financing toward Teva Pharmaceutical Industries’ $40.5 billion acquisition of Allergan’s generic drugs businesses announced in July. SMFG President Koichi Miyata said he tries to meet a top executive at a major company whenever he goes on a business trip abroad. “Financing deals is about whether you can maintain relationships with a business client…so I’m trying to reach out to contacts during my business trips in Asia, the U.S. and Europe,” Mr. Miyata said. Despite having ample cash on hand, Japanese bankers acknowledge that they could also face a challenge raising U.S. dollars for overseas lending as interest rates rise following the U.S. Federal Reserve’s rate increase this month. Mr. Miyata said SMFG would use dollar deposits and the commercial-paper market, while trying to build dollar holdings by issuing dollar corporate bonds and converting yen.