ADT acquires Defenders, its largest independent dealer

BOCA RATON, Fla.—ADT announced this week that it has acquired Defenders, its largest independent dealer and only Authorized Premier Provider, for a purchase price of approximately $381 million.

As part of the transaction, Defenders founder David P. Lindsey and Jessica A. Lindsey received approximately 16.3 million shares of ADT common stock for 100 percent of their ownership in Defenders, while the remaining $260 million of consideration was paid in cash to retire existing Defenders debt, fund other liabilities, and pay transaction expenses. The cash consideration was partially funded from existing revolving credit facilities.

“We're excited to officially join forces with the impressive Defenders team after successfully partnering with them for nearly 22 years so that, as one company, we can create a unique and simplified platform,” Jim DeVries, ADT's President and Chief Executive Officer, said in the announcement. “This opportunistic acquisition creates numerous strategic, financial and operational advantages for ADT, and is consistent with our stated goal of driving down the capital intensity of the business as we seek to drive long-term, profitable growth.”

Founded in 1998 and headquartered in Indianapolis, Defenders has approximately 2,900 team members across more than 130 field branch locations

 “We have built our business by partnering with ADT to sell and install state-of-the-art security systems, helping to protect more than 2.2 million families through our best-in-class marketing team and expert knowledge of the industry,” David Lindsey, chairman and founder, Defenders, said about the deal. “Given this longstanding and productive relationship, we are proud that this transaction will integrate us even closer into the ADT team, and I am excited to be a significant shareholder and see the benefits we are able to deliver to customers as a combined company.”

Jim Boyce, President & CEO, Defenders, added, “We are thrilled to join the ADT team. This acquisition brings our direct response marketing capabilities, best in class sales expertise, and national reach to a leading provider of security, automation, and smart home solutions. Together, we will be better positioned to leverage the trusted ADT brand, improve the combined company's go-to-market operations and deliver an enhanced customer experience.”

ADT said the strategic and financial benefits of transaction include:
• Enhances Customer Experience;
• Simplifies Operating Ecosystem;
• Improves Marketing Prowess;
• Increases Go to Market Efficiency; and
• Drives Capital Efficiency

“Together, we will have greater marketing efficiency through unified brand messaging, enhanced control of the customer experience, and the ability to provide a full suite of innovative security and home automation products, including consumer financing, to a complementary geographic footprint,” said DeVries. “Over time, we also expect lower subscriber acquisition costs, an improved revenue payback period, and new account gains from the optimization of our combined ecosystem.”

Citi served as the financial advisor to Defenders.