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.
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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