ADT Acquires Defenders, Its Largest Independent Dealer
ADT says the deal enhances its ability to bring new initiatives to a broader customer base more quickly, including consumer financing, DIY gear and more.
Defenders Founder David Lindsey and Jessica Lindsey received approximately 16.3 million shares of ADT common stock for 100% of their ownership in Defenders.
BOCA RATON, Fla. — ADT (NYSE: ADT) said Monday it acquired Defenders, its largest independent dealer, for approximately $381 million. The purchase price is based on ADT’s closing stock price of $7.45 on Jan. 3, according to an announcement.
“We’re excited to officially join forces with the impressive Defenders team after successfully partnering with them for nearly 22 years so that, as one company, we can create a unique and simplified platform,” states ADT President and CEO Jim DeVries. “This opportunistic acquisition creates numerous strategic, financial and operational advantages for ADT, and is consistent with our stated goal of driving down the capital intensity of the business as we seek to drive long-term, profitable growth.”
As part of the transaction, Defenders Founder David Lindsey and Jessica Lindsey received approximately 16.3 million shares of ADT common stock for 100% of their ownership in Defenders. The remaining $260 million of consideration was paid in cash to retire existing Defenders debt, fund other liabilities and pay transaction expenses. The cash consideration was partially funded from existing revolving credit facilities.
“Together, we will have greater marketing efficiency through unified brand messaging, enhanced control of the customer experience, and the ability to provide a full suite of innovative security and home automation products, including consumer financing, to a complementary geographic footprint,” DeVries continues. “Over time, we also expect lower subscriber acquisition costs, an improved revenue payback period, and new account gains from the optimization of our combined ecosystem.”
In 2014, Defenders was recognized by ADT as its only Authorized Premier Provider.
“We have built our business by partnering with ADT to sell and install state-of-the-art security systems, helping to protect more than 2.2 million families through our best-in-class marketing team and expert knowledge of the industry,” says David Lindsey. “Given this longstanding and productive relationship, we are proud that this transaction will integrate us even closer into the ADT team, and I am excited to be a significant shareholder and see the benefits we are able to deliver to customers as a combined company.”
Founded in 1998 and headquartered in Indianapolis, Defenders staffs approximately 2,900 employees across more than 130 field branch locations. The company’s direct marketing efforts generate more than six billion ADT advertising impressions annually, according to the announcement.
Defenders, which offers a full suite of home security and automation products, has achieved an 85% interactive take rate. Since its founding the company has serviced more than 2.2 million households, according to the announcement.
“This acquisition brings our direct response marketing capabilities, best-in-class sales expertise and national reach to a leading provider of security, automation, and smart home solutions,” says Jim Boyce, president and CEO, Defenders. “Together, we will be better positioned to leverage the trusted ADT brand, improve the combined company’s go-to-market operations and deliver an enhanced customer experience.”
Citi served as the financial advisor to Defenders.
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About the Author
Rodney Bosch, Senior Editor
Although Bosch’s name is quite familiar to those in the security industry, his previous experience has been in daily newspaper journalism. Prior to joining SECURITY SALES & INTEGRATION in 2006, he spent 15 years with the Los Angeles Times, where he performed a wide assortment of editorial responsibilities, including feature and metro department assignments as well as content producing for latimes.com. Bosch is a graduate of California State University, Fresno with a degree in Mass Communication & Journalism. In 2007, he successfully completed the National Burglar and Fire Alarm Association’s National Training School coursework to become a Certified Level I Alarm Technician.
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This acquisition makes total sense for ADT purchasing their largest contributing dealer. Defender has been a sales mega force for ADT with valid solid installations over the years. This is a win win
Hopefully this means you can now deal with a single company. It is very frustrating to call the company you hired (ADT) and be told by them you’ll have to call Defenders.
Defenders are the worst company I’ve had the pleasure of doing business with. ADT, I feel this acquisition may be gold mine for you, but for me as a customer, at this point, I would be hard pressed to ever consider your products in the future.
This is the worst company. Nothing but horrible service with the Defenders company. I call ADT and they send me to Defenders and they are no help. They lied to me about my security system and changed everything on me. I tried to cancel and they wanted to charge me even though ADT offers a 6 month money back guarantee that Defenders said they don’t honor. I hate that I’m stuck with ADT for now, but do not recommend them and stay away unless you get everything in writing because they are no help after they get your money. I had to call them 3 times until someone would actually listen to me. I should have stayed with Brinks, but I decided to get what I thought was better equipment for less money and it bit me in the butt. Cheaper isn’t always better. Beware stay away from ADT.