In a statement, ADT announced the team-up with the country’s largest home insurer to expand innovative smart-home technology offerings and risk-mitigation capabilities for homeowners. The company provides residential and business electronic security, fire protection, and other alarm monitoring services across the US.
ADT will commence a self-tender offer for an equal number of its outstanding common and Class B stock at the same price, eliminating any dilution from State Farm’s investment, according to the statement. Funds managed by affiliates of Apollo Global Management Inc., ADT’s majority owner, are ensuring the offering is fully subscribed.
“ADT’s partnership with State Farm creates the capability to drive innovation in homeowners’ insurance on a broad scale. By delivering a truly connected home, we can improve the customer experience and provide more peace of mind,” said Jim DeVries, ADT President and CEO.
“These new and expanded partnerships represent another bold step forward for our company and provide ADT more avenues to grow our customer base, strengthen brand loyalty and lower customer acquisition costs.”
ADT and State Farm will also collaborate with Google on next-generation security and smart-home technology to detect and prevent homeownership risks. State Farm will commit $300 million for innovation and marketing, and Alphabet Inc.’s Google will commit an additional $150 million. Google is already in a relationship with ADT, and its new pledge brings its total commitment to $300 million.
“We’ve always recognized our responsibility to go beyond insurance and find ways to build stronger and safer communities for our customers and the neighborhoods we serve,” remarked State Farm chief operating officer Paul Smith.
“This partnership gives State Farm the opportunity to provide smart-home technology that takes us from our ‘repair and replace’ model to a ‘predict and prevent’ mindset.”
With the investment, State Farm will gain a seat on ADT’s board. The Illinois-based firm intends to designate COO Smith to the position. The investment is scheduled for completion early in the fourth quarter.