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Google partners with ADT through US$450M equity investment


August 4, 2020
By SP&T Staff

ADT in the U.S. and Google announced Monday they are entering into a long-term partnership which will combine Nest’s hardware and services, powered by Google’s machine learning technology, with ADT’s installation, service and professional monitoring network.

ADT said it expects to offer certain Google devices to its customers beginning this year and to expand the integration in 2021.

Google will make a US$450 million investment in ADT in exchange for shares of a newly created Class B common stock having all of the rights and preferences of ADT’s common stock except for the right to vote on the election, appointment or removal of directors. Upon the closing of Google’s equity investment in ADT, Google will own 6.6% of ADT’s outstanding aggregate common equity. 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 US$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. The companies state 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.

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“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,” said Jim DeVries, president and CEO of ADT, in a statement. “Google’s partnership and financial investment in ADT underscores the depth of our joint commitment to the smart home and security markets. Our entire leadership team is looking forward to continuing our work with Google as we define the future of helpful home security and build a productive long-term partnership.”

“We’re excited to partner with ADT to further our mission of building helpful devices for the home,” said Rishi Chandra, GM and Vice President of Nest. “ADT is a leader in smart home security, and I look forward to working with the team to create innovative smart home security solutions that help everyone feel safe and protected.”

Telus acquired ADT Canada in November 2019 for an estimated $700 million.