Editor's take: It's hard to see how this isn't a wise move for both companies involved. The smart home security sector is booming with multiple players now offering compelling consumer solutions. By teaming with an established player like ADT, Google's Nest has a much clearer path into the home, especially with consumers that don't want to fool with the hassle of setting up gear themselves. ADT, meanwhile, gets to bolster its service with a well-established brand in the smart home space.
Google is teaming up with home security and automation provider ADT in an effort to “create the next generation of the helpful home.”
Per the long-term, strategic partnership, ADT’s more than 20,000 team members will be able to sell and install devices from Google’s Nest division such as Nest Cameras and the Nest Hub Max. ADT notes that over time, Nest devices powered by Google’s machine learning capabilities will enhance their security monitoring services, which will lead to fewer false alarms, better detection of potential incidents and more ways to receive notifications.
ADT anticipates the rollout of Google devices to its customers to start later this year with expanded integration carrying over into 2021.
Google is investing $450 million in ADT in exchange for a 6.6 percent equity stake consisting of newly created Class B common stock. These shares have all of the rights and preferences of the ordinary stock, except voting rights when it comes to the appointment and removal of directors. ADT said it will use the money from the investment to accelerate growth and reduce leverage over time.
It’s also worth noting that each company will commit up to an additional $150 million (upon reaching certain milestones) that’ll be used for product development, employee training and co-marketing to help advance the partnership. With both firms having significant skin in the game, it helps to ensure that neither side gets lazy and leaves the heavy lifting to the other.