ADT announces State Farm investment, partnership

BOCA RATON, Fla. and BLOOMINGTON, Ill.—ADT has announced it will receive a $1.2 billion equity investment from State Farm, resulting in the home insurance provider owning approximately 15 percent of the company after the equity investment and the tender offer close. 

This investment will allow State Farm to acquire 133.3 million shares of ADT’s common stock at $9 per share. 

In addition, ADT plans to partner with State Farm and build upon its existing relationship with Google, with the aim to expand opportunities to combine next-generation security, innovative smart home technology and reimagined risk-mitigation capabilities to monitor, detect, prevent and optimize against homeownership risks.

State Farm, one of the largest insurers of homes in the U.S. with 13.7 million homeowners policies in force, 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.

“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,” said 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.”

By partnering with State Farm, ADT aims to create a comprehensive solution across home and mobile safety to help customers recover from unexpected risks with proactive safety and security. ADT 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; and
• 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.

“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,” said Paul Smith, Chief Operating Officer at State Farm. “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.”

“A smart home should take care of the people in it while also helping to make sure they are protected and safe,” added Rishi Chandra, Vice President and General Manager of Google Nest. “Our work with ADT is building the next generation of smart home security solutions.”

For more information, visit https://newsroom.adt.com/corporate-news/adt-announces-partnership-with-state-farm-plans-innovative-offering-that-combines-security-risk-mitigation-and-smart-home-capabilities-to-revolutionize-the-customer-experience