ADT Announces Closing of State Farm's $1.2B Equity Investment
ADT announced Thursday it closed State Farm’s $1.2 billion investment in the home security company, in a private placement of 133.3 million shares (see 2209060041). The companies said in September they planned to “revolutionize the homeownership experience” via mitigation of…
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property losses through detection and monitoring. In addition to the equity investment of 15% in ADT, State Farm committed up to $300 million to fund “product and technology innovation, customer growth and marketing activities” associated with the partnership. State Farm has funded the first $100 million and the two companies will collaborate to approve initiatives using the funds, they said Thursday. Part of the investment includes a seat on ADT’s board; State Farm designated Chief Operating Officer Paul Smith as its representative. On a September call, ADT CEO Jim DeVries said partnering with State Farm will give ADT the chance to “capture a greater share of market by using ADT’s smart home security offerings to drive innovation in homeowners’ insurance.” A first-of-its-kind integrated offering will deliver “substantial customer value using smart home technology” to mitigate losses from water, fire and intrusion, “moving from a repair and replace model to a predict and prevent mindset," he said. As part of last month's announcement, Google committed an incremental $150 million to its existing success fund, earmarked for expanding access to smart home innovation and technologies to more customers via new sales and marketing programs. Google spent $450 million (see 2008040064) for 6.6% of ADT in August 2020 to create “the next generation of the helpful home.” ADT said it plans to repurchase up to 133.3 million shares in a tender offer that initiated Sept. 12.