Google is picking up a 6.6% stake in ADT Inc for $450 million, gambling on the house security company’s strong customer base and an army of technicians to induce sales of its Nest apparatus.
ADT shares nearly doubled to hit a high of $17.2 and traded well above their IPO price of $14 for the first time since going public in 2018, temporarily valuing the company at about $13 billion.
The investment gives ADT the backing of a technology associate and broadens its solutions company. In return, Google gets access to about 6.5 million clients, strengthening its existence as it competes with Amazon.com’s Ring and Boston-based SimpliSafe, amongst others.
ADT stated on Monday that the two companies would work on approaches to pack popular Google products like Home Mini, Nest Thermostat and Nest Wifi with ADT’s strength in setup and maintenance.
The companies will commit an additional $150 million each for technology, product development, co-marketing and worker training, ADT said.
Google will purchase 54.7 million newly created Class B shares of ADT for $8.22 each with no voting rights, the Boca Raton, Florida-based company said in a filing.
Founded in 1874, ADT is endorsed by private-equity company Apollo Global Management LLC, which possesses 83.5% of the company, according to Refinitiv data. Apollo had taken ADT personal in a nearly $7 billion deal in 2016.
The team at Platform Executive hope you have enjoyed this news article. Initial reporting via our content partners at Thomson Reuters. Reporting by Subrat Patnaik in Bengaluru. Editing by Saumyadeb Chakrabarty and Anil D’Silva.
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