By Sam Boughedda
ADT Corp (NYSE:ADT), the smart home and small business security firm, announced Tuesday that it has secured investments totaling $1.5 billion from both State Farm and Google (NASDAQ:GOOGL).
State Farm will make a $1.2 billion equity investment in ADT, resulting in it owning approximately 15% of the company. In addition, ADT said it plans to partner with State Farm and "build upon its existing relationship with Google" to expand opportunities.
Furthermore, State Farm will commit up to $300 million to fund product and technology innovation, customer growth, and marketing, while Google has separately agreed to commit an incremental $150 million, subject to certain milestones, 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.”
At the time of writing, ADT shares are up more than 14% following the news.