ADT Announces Partnership with State Farm, Plans Innovative Offering that Combines Security, Risk Mitigation, and Smart Home Capabilities to Revolutionize the Customer Experience

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GLENDALE, California, September 7 — ADT, a provider of security and automation solutions for homes and businesses, posted the following news on September 6, 2022:

ADT, the most trusted brand in smart home and small business security, and state farmthe century-old good neighbor and the largest home insurer in the WE with 13.7 million home insurance policies in force, announced today that state farm will make a $1.2 billion equity investment in ADT, resulting in state farm holding approximately 15% of ADT after the closing of the equity investment and tender offer (described below). In addition, ADT plans to partner with state farmand builds on its existing relationship with Google, with the aim of expanding the possibilities of combining next-generation security, innovative smart home technology and redesigned risk mitigation capabilities to monitor, detect, prevent and optimize property risks.

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 undertake $150 millionsubject to the achievement of certain milestones, to advance the opportunities created by this type of innovation, bringing its total commitment of success funds to $300 million.

“ADT’s partnership with state farm creates the ability to drive innovation in home insurance at scale. By delivering a truly connected home, together we can enhance the customer experience and provide greater peace of mind,” said Jim DeVries, President and CEO of ADT. “These new and expanded partnerships represent another bold step forward for our business and provide ADT with more ways to grow our customer base, build brand loyalty and reduce customer acquisition costs.”

At its Investor Day earlier this year, ADT presented a strategy focused on customer, security and innovation. The company, with state farm, aims to create a comprehensive home and mobile security solution to help customers recover from unexpected risks through proactive protection and security. ADT envisions customer benefits that may include:

* An integrated security, protection and smart home solution that monitors, detects, prevents and optimizes property risks and enables customers to protect and connect what matters most, providing increased peace of mind;

* Lower homeowners insurance premiums with safe home owner discounts for homes equipped with ADT smart home security systems and powered by Google devices; and

* Reduced frequency and severity of claims through proactive protection with ADT’s patented SMART monitoring technology that helps protect against damage from water, fire, intrusion and others common property risks.

“As an industry leader, we have always recognized our responsibility to go beyond insurance and find ways to build stronger, safer communities for our customers and the neighborhoods we serve” , said Paul Smithchief operating officer at state farm. “This partnership gives state farm the opportunity to deliver smart home technology that moves us from our “fix and replace” model to a “plan and prevent” mindset. These innovations will help us take another step into the future of home insurance and add more value to our customers. »

“A smart home should take care of the people in it while ensuring they are protected and safe,” said Rishi Chandravice president and general manager of Google Nest. “Our work with ADT is building the next generation of smart home security solutions.”

transaction details

state farm agreed to make $1.2 billion investment in ADT to acquire 133.3 million shares of ADT common stock at $9 per share. With their investment state farm will obtain a seat on the ADT board of directors and intends to appoint Paul SmithExecutive Vice President and Chief Operating Officer of state farm. state farm the equity investment, which is subject to customary closing conditions, is expected to close early in the fourth quarter of 2022.

In connection with state farm equity investment, ADT will launch a tender offer for up to 133.3 million outstanding common shares and Class B common shares at $9 per share, financed by the proceeds of the state farm A fair investment. The tender offer should eliminate any dilution of state farm A fair investment. Funds managed by affiliates of Apollo Global Management, Inc., majority shareholder of ADT, have pledged to support the entire offering to ensure that it is fully subscribed. Google, the sole holder of ADT’s Class B common stock, will not offer any of its shares. After the closing of the equity investment and the public tender offer, state farm will own approximately 15% of ADT, and Google will continue to own a 6% stake (on an as-converted basis) in ADT.

Citi and Evercore were ADT’s financial advisors, and Cravath, Swaine & Moore LLP acted as legal counsel. Morgan Stanley & Co. LLC was the financial advisor to state farmand Sidley Austin LLP acted as legal counsel.

Conference call

ADT management will discuss the partnership and other related matters during a conference call and webcast from 10:00 a.m. ET today. Participants can listen to a live webcast on the Investor Relations website at investor.adt.com. A replay of the webcast will be available on the website within 24 hours of the live event.

Alternatively, participants can listen to the call live by dialing 1-888-660-6144 (domestic) or 1-929-203-0865 (international) and providing the passcode 5974526. An audio replay will be available for two weeks after the call. and can be accessed by dialing 1-800-770-2030 (domestic) or 1-647-362-9199 (international) and providing password 5974526.

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* New integrated offering aims to deliver substantial customer value with smart home technology to detect and mitigate losses related to water, fire, intrusion and other property risks

* state farm invest $1.2 billion in ADT at $9.00 per share, acquiring approximately 15% of the company

* In addition, state farm will invest up to $300 million in an opportunity fund to support product innovation, technology and marketing that seek to differentiate and improve the customer experience for owners

* Google is committed to $150 million in a success fund in support of this opportunity to expand access for more customers to innovation and smart home technologies through new sales programs and other related activities

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Original text here: https://newsroom.adt.com/corporate-news/adt-announces-partnership-with-state-farm-plans-innovative-offering-that-combines-security-risk-mitigation-and-smart-home-capabilities- revolutionize the customer experience

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