Google is investing $450m to buy a 6.6% stake in Florida security company ADT and combining its Nest hardware with ADT’s security, installation and monitoring service to create an integrated set of devices, software and services for the secure smart home.
 
Each company has committed $150m for co-marketing, product development, technology and employee training. The partnership should provide integrated smart home technology for both DIY and professionally installed security offerings.
 
The long-term partnership aims to create the next generation of smart home security offerings. The partnership will combine Nest’s hardware and services, powered by Google’s machine-learning technology, with ADT’s installation, service and professional monitoring network to create a more helpful smart home and integrated experience for users across the USA.
 
They will integrate Google’s hardware and services and ADT’s DIY and professionally installed smart home security for the residential and small business security industry. The future ADT plus Google helpful home security 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, CEO of ADT. “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.”
 
The partnership pairs ADT’s more than 20,000 professionals with Google’s suite of home hardware, manufacturing technology and vertical technology stack.
 
“We’re excited to partner with ADT to further our mission of building helpful devices for the home,” said Rishi Chandra, vice president of Nest. “ADT is a leader in smart home security, and I look forward to working with the team to create innovative smart home security that helps everyone feel safe and protected.”
 
ADT and Google aim to offer users integrated helpful home security. The partnership is underpinned by a long-term commitment from both companies to making safe, secure, private and differentiated products accessible to new and existing customers.
 
The simplified security combination will sit at the centre of the helpful home, and advances in machine learning should transform the smart home security customer experience.
 
ADT expects to offer certain Google devices to its customers beginning this year and to expand the integration in 2021. The complete ADT plus Google helpful home security will use a secure platform for a seamless experience that prioritises privacy and interoperability for more customer peace of mind and choice.
 
Google will make a $450m investment in ADT in exchange for shares of a newly created Class B common stock having all of the rights and preferences of ADT’s common stock except for the right to vote on the election, appointment or removal of directors. Upon the closing of Google’s equity investment in ADT, Google will own 6.6% of ADT’s outstanding aggregate common equity. Google’s equity investment, which is subject to customary closing conditions, is expected to close in the third quarter of 2020. Proceeds will be used to fuel growth and reduce leverage over time.
 
Each company will commit an additional $150m, 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.