ADT announced on Monday morning that Google will make a $450 million investment in ADT - a total of 6.6% of the company - as part of a new strategic partnership where ADT will offer Nest products in addition to its traditional professional and DIY securtiy offerings.
“We are thrilled to partner with Google to provide the smart home market with a strong, differentiated product and service offering that integrates the best technology, hardware and smart home security expertise from our two brands,” Jim DeVries, President and CEO of ADT, explained in a press release. “Google’s partnership and financial investment in ADT underscores the depth of our joint commitment to the smart home and security markets.”
The partnership will integrate Google’s hardware and services and ADT’s DIY and professionally installed smart home security solutions to innovate the residential and small business security industry, according to the release. "The future ADT + Google helpful home security solution is expected to advance smart home offerings and attract new consumers seeking premium technology, end-to-end smart home service and trusted security," the release says, adding that "the simplified yet innovative ADT + Google security solution will sit at the center of the new, helpful home, and advances in machine learning will transform the smart home security customer experience."
Google’s equity investment, which is subject to customary closing conditions, is expected to close in the third quarter of 2020. Proceeds will be used to fuel growth and reduce leverage over time.
Each company will commit an additional $150 million, subject to the achievement of certain milestones, to be used for co-marketing, product development, technology and employee training to advance the partnership. These investments are expected to accelerate ADT’s capital efficient growth and drive broader consumer awareness and deeper product innovation for both companies in the fragmented yet rapidly expanding smart home market.
In pre-trading on the stock market Monday, ADT shares were up more than 70%, while shares of competitors Alarm.com and Resideo were down 3.5% and 4.4%, respectively.
ADT and Google are expected to hold a press conference on Monday afternoon. Expect more coverage from SecurityInfoWatch.com.