ADT secures more than $1.5bn in new investments, shares surge

ADT confirmed on Tuesday that it had secured investments totalling $1.5bn from State Farm Insurance, and a further $150m from Alphabet's Google, sending shares in the company surging.

State Farm will make a $1.2bn equity investment in return for a 15% stake in ADT. The insurer will buy 133.3m shares of ADT’s common stock at $9 per share. This will give State Farm a seat on the company’s board of directors.

In addition, the insurer will commit up to $300m to fund product and technology innovation, customer growth and marketing.

Separately, Google has agreed to commit an incremental $150m, subject to the achievement of certain milestones, raising its total success fund commitment to $300m.

ADT president and chief executive Jim DeVries said: "ADT’s partnership with State Farm creates the capability to drive innovation in homeowners’ insurance on a broad scale. By delivering a truly connected home, together we can improve the customer experience and provide more peace of mind.

"These new and expanded partnerships represent another bold step forward for our company and provide ADT more avenues to grow our customer base, strengthen brand loyalty and lower customer acquisition costs."

At 1340 BST, the shares were up 15% in pre-market trade at $8.26.