The parent company of Google Alphabet Inc. (GOOGL) is set to purchase 6.6% stake in ADT Inc. (ADT) in a deal where the tech giant will cash out $450 million. Google is aiming at capitalizing on its strong customer base and its tech experts to increase sale of ADT’s devices.
This deal grants ADT confidence and backing of a high profile tech company as a partner and this will for sure widen its services business. On the other hand, Google will get access to nearly 7 million customers, this will place in a better place to compete with Amazon.com (AMZN) owned Simplisafe.
ADT said this partnership will involve the two companies working together to package popular products from Google like Nest Wi-Fi, Nest Thermostat and Home Mini.
“Later this year, we will begin integrating Google devices and make them available for installations to our customers. We will exclusively support Nest products,” said ADT’s CEO, Jim DeVries.
The CEO added that the two companies will develop and build products together which they intend to start selling next year.
Separately, the two companies will further commit $150 million each for jointly marketing these products and training of employees.
According to the regulation filing, Google will be buying 54.7 million class B shares of ADT at a price of $8.22 per share with no voting rights.