Google to buy stake in ADT in $450M Google Nest security deal

Yolanda Curtis
August 4, 2020

Alphabet Inc.'s Google has agreed to pay $450 million for a stake in security firm ADT part of a partnership to create smart-home security products. Presumably, that means that Google's tech will replace ADT's own-branded cameras and doorbell, for example.

The deal gives Google a 6.6 per cent stake in the Boca Raton, Florida-based ADT, the largest home security company in the U.S. with about 20,000 employees and more than 6 million customers. ADT shares jumped 66% in pre-market trading after closing at $8.61 in NY on Friday.

Google's investment bought a 6.6% stake in ADT to kick off a long-term partnership.

Until now, ADT hasn't favoured one company's products over another.

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

The U.S. smart-home market is experiencing "explosive gains", DeVries said and is projected to grow 20% annually.

ADT's announcement went on to say that each company will commit an additional $150 million to the partnership, subject to the achievement of specific milestones, that will be used for marketing, product development and technology training.

Over time, Nest's devices will enhance ADT's security monitoring and become the "cornerstone of ADT's smart home offering", said Rishi Chandra, vice president and GM at Nest, in a blog post.

Founded in 1874, ADT is backed by private-equity firm Apollo Global Management LLC, which owns 83.5 per cent of the company, according to Refinitiv data. The deal is expected to close in the third quarter of 2020.

Mr DeVries said ADT doesn't give cameras to police and doesn't have hardware deals with law enforcement.

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