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Telus to acquire ADT Canada for $700M

Telus announced Tuesday it has struck an agreement with ADT to acquire its ADT Security Services Canada business for about $700 million. ADT Canada employs 1,000 people and services approximately 500,000 residential and business customers.

In a statement, Telus said it is “proud to deepen ADT Canada’s roots by ensuring its services continue to be provided and supported by a Canadian company that also prioritizes privacy and security.”

The company added that the aquisition builds on its strategy to leverage its PureFibre network, the backbone of its wireless network.

In January 2018, Telus acquired AlarmForce Industries operations in Western Canada from BCE, adding 39,000 customers in B.C., Alberta and Saskatchewan. Using that acquisition as a base, Telus also launched SmartHome Security and SecureBusiness in July 2018, which the company says provides home and business automation, 24/7 monitoring for fires, floods, carbon monoxide leaks and break-ins, and other connected features that can be managed via the Telus SmartHome Security app. Telus noted that the ADT acquisition will not only support Telus’s security strategy but also its home health offerings, including remote patient care.

In March of this year, Telus co-launched a new Telus Health app through partner Babylon, allowing B.C. customers to organize remote video appointments with a doctor on their smartphones.

In a separate statement on the acquisition, ADT said that the sale of its Canadian business will allow the company to focus more on its U.S. business.

“Opportunities continue to develop for ADT in the areas of smart home integration, the expansion of the home security business into new demographics and ADT’s growth in commercial security,” said Jim DeVries, President and CEO, ADT. “The sale of our more capital intensive Canadian operations enables us to sharpen our focus on the exciting growth and higher margin opportunities in the U.S., where we can more efficiently invest our time and resources. Importantly, these emerging opportunities are ideal for leveraging the trusted ADT brand as we continue generating strong free cash flow to drive shareholder value over the long term.”

ADT said its Canadian operation generated US$229 million in revenue in the 2018 fiscal year ended Dec. 31.

The Telus-ADT transaction is expected to close in the fourth quarter of 2019, pending regulatory approval and the satisfaction of other conditions. Telus also said it expects to add 12,000 new customers to its security business prior to closing, bringing its total base to about 100,000 before the addition of ADT customers.