ADT Announces Closing of $1.2 Billion Equity Investment By State Farm
Partnership, including $300 million opportunity fund commitment by State Farm, revolutionizes the customer experience by combining security, risk mitigation and smart home capabilities
ADT today announced that it has issued and sold in a private placement to State Farm 133.3 million shares of ADT common stock for a gross purchase price of $1.2 billion.
In September, ADT announced a new partnership with State Farm to revolutionize the homeownership experience through innovation in the detection and mitigation of property losses. In addition to the equity investment, State Farm has committed up to $300 million to fund product and technology innovation, customer growth and marketing activities in connection with the partnership. State Farm has funded the first $100 million and the two companies will collaborate to approve initiatives using the funds.
“We’re excited to begin innovative work with State Farm to develop new technology, products, and services that create safer, smarter and more protected homes while improving the overall customer experience for millions of homeowners,” said Jim DeVries, ADT president and CEO. “Our partnership with State Farm perfectly illustrates ADT’s mission and long-term strategy, shared during our Investor Day in March, to deliver safe, smart and sustainable solutions through innovative offerings, unrivaled safety and premium experiences.”
As part of the equity investment, State Farm obtained a seat on ADT’s Board of Directors. State Farm has designated Paul Smith, Executive Vice President and COO, as their representative. Smith has joined the ADT Board of Directors as a Class II director with a term expiring at the 2025 annual meeting.
“We are pleased to welcome Paul to our board of directors,” said ADT’s Chairman, Marc Becker. “Paul’s distinguished leadership at State Farm, the largest insurer of homes in the United States, will be instrumental to this long-term strategic partnership to spur innovation in preventative safety solutions for homeowners.”
“It’s my honor to join ADT’s Board of Directors as two industry leaders, with complementary services and customer bases, partner to enhance the homeownership experience through innovation in smart home technology and professional monitoring,” said Smith. “Both ADT and State Farm deeply value innovation, providing remarkable customer experiences and helping customers live life confidently knowing their home is secure. State Farm looks forward to advancing this pivotal alliance.”
ADT intends to repurchase up to 133.3 million shares of common stock in its tender offer that commenced on Sept. 12, 2022. ADT will fund the repurchase of its common stock with the proceeds of the State Farm investment and pay the fees and expenses in connection with the tender offer with available cash.
The tender offer was conditioned upon, among other things, the completion of the State Farm investment (the “Strategic Investment Condition”). Because of the completion of the State Farm investment, the Strategic Investment Condition was satisfied. The tender offer is expected to expire on Oct. 20, 2022. Further details, including the terms and conditions of the tender offer, are set forth in the materials filed with the Securities and Exchange Commission relating to the tender offer.