The two companies announced Monday that they will combine Google’s Nest hardware and services with ADT’s offerings. ADT sells security and automation systems to help detect intrusions and hazards such as smoke, fires and floods, and employs personnel to respond to alarms by relaying information to first responders.
The partnership will help ADT better compete in the smart home market, the company said, adding that it will use the proceeds from the transactions to grow its business and reduce debt. Google said its machine learning capabilities will support ADT’s smart home offerings, aimed at providing fewer false alarms, more ways to receive notifications and better detection of potential incidents.
ADT shares climbed nearly 57% in Monday trading, to end the trading day at $ 13.48. Shares of parent company Google Alphabet Inc. edged down 0.35% to $ 1,482.76
Google bought Nest, a maker of internet-connected home electronics, for $ 3.2 billion in 2014. It renamed the popular Google Home Mini to Nest Mini last year, and the company placed under Nest’s name is an improved mesh router that includes accessories that double as smart speakers.
Google has invested billions of dollars in recent years to strengthen its hardware unit, which has lagged behind other business segments.
Nest competes with products like Amazon.com Inc.’s Ring and other home security devices with the tech. But acquisitions such as Nest have contributed to antitrust concerns among critics.
Executives from Google, Amazon, Facebook Inc. and Apple Inc., grilled on Capitol Hill last week, defended their business practices in Congress, saying they face fierce competition that requires them to serve customers and to innovate.
ADT said that while it aims to develop products with Google, it will continue to have a relationship with Amazon, with customers able to integrate their security systems through Amazon’s Alexa voice assistant.
Google’s participation in ADT will take the form of a new class of shares, although it will not have the right to vote to appoint or remove the directors of ADT. The transaction is expected to close during the current quarter.
ADT said on Monday that its second-quarter losses were roughly flat compared to the period a year earlier, when it reported a loss of $ 104.1 million, and that its monthly performance improved. throughout the quarter. ADT ended the June quarter with approximately $ 45 million in cash and cash equivalents, he said.
The company is due to release its full second quarter financial report on Wednesday.
–Michael Dabaie contributed to this article.
Write to Dave Sebastian at [email protected]