Google Cuts $630M Deal To Get Share Of Security Market
US security group ADT who have a major home and business security operation in Australia has cut a deal with Google who are looking to expand their smart home offering which is sold via retailers JB Hi Fi, The Good Guys and Harvey Norman.
The new premium market offering could see the combined ADT and Google services offered by custom installers.
Alphabet Inc the owners of Google are buying a A$632 million stake in home security firm ADT a move that will see them owning 6.6% of the Company.
ADT is the largest home security company in the U.S. and have operated in Australia for several years.
The Company claims that Google’s prowess in hardware design and software will give ADT access to technology it wouldn’t be able to build on its own.
ADT will begin distributing Google’s Nest home products exclusively in markets such as Australia.
Shares of ADT skyrocketed as much as 100% before pulling back somewhat.
They were up 57% to $14.40 at 11:17 a.m. in New York. Google shares were little changed.
“We’re excited to partner with ADT to further our mission of building helpful devices for the home,” said Rishi Chandra, GM, and Vice President of Nest in a statement. “ADT is a leader in smart home security, and I look forward to working with the team to create innovative smart home security solutions that help everyone feel safe and protected.”
The partnership will integrate Google’s hardware and services and ADT’s DIY and professionally installed smart home security solutions to innovate the residential and small business security industry.
The future ADT + Google helpful home security solution is expected to advance smart home offerings and attract new consumers seeking premium technology, end-to-end smart home service and trusted security.
“We are thrilled to partner with Google to provide the smart home market with a strong, differentiated product and service offering that integrates the best technology, hardware and smart home security expertise from our two brands,” said Jim DeVries, President and CEO of ADT in a statement.
He added “Google’s partnership and financial investment in ADT underscores the depth of our joint commitment to the smart home and security markets. Our entire leadership team is looking forward to continuing our work with Google as we define the future of helpful home security and build a productive long-term partnership.”
Each company will commit an additional $150 million, subject to the achievement of certain milestones, to be used for co-marketing, product development, technology, and employee training to advance the partnership.
These investments are expected to accelerate ADT’s capital efficient growth and drive broader consumer awareness and deeper product innovation for both companies in the fragmented yet rapidly expanding smart home market.