ADT says it plans to partner with State Farm to build upon an existing relationship with Google in a $1.2 billion equity investment in which State Farm will own approximately 15% of ADT. State Farm will commit up to $300 million to fund product and technology innovation, customer growth, and marketing.
In addition, Google has separately agreed to commit an incremental $150 million, subject to the achievement of certain milestones, to advance opportunities created by this type of innovation, raising its total success fund commitment to $300 million, according to the company.
“ADT’s partnership with State Farm creates the capability to drive innovation in homeowners insurance on a broad scale. By delivering a truly connected home, together we can improve the customer experience and provide more peace of mind,” says Jim DeVries, ADT president, and CEO.
“These new and expanded partnerships represent another bold step forward for our company and provide ADT more avenues to grow our customer base, strengthen brand loyalty, and lower customer acquisition costs.”
ADT, along with State Farm, aims to create a comprehensive solution across home and mobile safety to help customers recover from unexpected risks with proactive safety and security. ADT says it envisions customer benefits that may include:
- An integrated security, protection, and smart home solution that monitors, detects, prevents, and optimizes against homeownership risks and empowers customers to protect and connect what matters most, delivering increased peace of mind
- Lower homeowners insurance premiums through safe homeowner discounts for homes equipped with ADT smart home security systems and powered by Google devices
- Reduced claim frequency and severity with proactive protection through ADT’s patented SMART monitoring technology that helps protect against damage from water, fire, intrusion, and other common homeownership risks
“A smart home should take care of the people in it while also helping to make sure they are protected and safe,” says Rishi Chandra, VP, and GM of Google Nest. “Our work with ADT is building the next generation of smart home security solutions.”
With its investment, State Farm will obtain a seat on ADT’s Board of Directors and intends to designate Paul Smith, executive VP, and COO of State Farm. State Farm’s equity investment, which is subject to customary closing conditions, is expected to close early in the fourth quarter of 2022.
“As the industry leader, we’ve always recognized our responsibility to go beyond insurance and find ways to build stronger and safer communities for our customers and the neighborhoods we serve,” comments Smith.
“This partnership gives State Farm the opportunity to provide smart home technology that takes us from our ‘repair and replace’ model to a ‘predict and prevent’ mindset. These innovations will help us take the next step into the future of home insurance and add more value for our customers.”
Check out ADT President of Corporate Development Jeff Likosar’s announcement below. You can view the investor presentation slideshow here.
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