Global technology company Google, which is well known for its search engine service has agreed to make an investment of $450 million in security-monitoring provider ADT Inc to buy a 6.6% stake in.
The move is expected to bolster the search engine giant’s hardware business and capitalize on growth in the market for smart-home security products.
Both organizations are expected to combine Google’s Nest hardware and services with ADT’s offerings. ADT offers security and automation systems that detect intrusion and hazards such as smoke, fire and flooding, and offers personnel at service to react to alarms by relaying information to first responders.
ADT will offer some Google devices to its customers starting this year and follow up with a jointly developed product in 2021. Both organizations will commit an additional $150 million, subject to certain milestones, for joint marketing and product development, among other initiatives.
The association will benefit ADT to compete better in the smart-home market, adding that it will use transaction proceeds to expand its business and reduce debt. Google will offer its machine-learning capabilities to support ADT’s smart-home offerings, aiming to provide fewer false alarms, more ways to receive notifications and better detection of potential incidents.
Google similarly bought Nest, a maker of internet-connected home electronics, for $3.2 billion in 2014. It renamed the popular Google Home Mini as Nest Mini last year, and the company placed under the Nest name an upgraded mesh router that includes accessories that double as smart speakers.
ADT will continue to have a relationship with its current associate Amazon, with customers being able to integrate their security systems through Amazon’s Alexa voice assistant.
The transaction which is expected to close in the current quarter will be carried out by forming a newly created class of stock for Google which won’t have voting rights.
