Shares of ADT Inc. shot up 13.7% in premarket trading Tuesday, after The Wall Street Journal reported that insurer State Farm has invested $1.5 billion in the home security provider, and a partnership aimed at expanding ADT's customer base. Under terms of the investment, State Farm will pay $1.2 billion to buy 133.3 million ADT shares. That represents about a 15% stake in the company, the WSJ report said, and a price for ADT shares of about $9 each, or about 25% above Friday's closing price of $7.21. State Farm will also invest up to $300 million to fund product and technology innovation and for marketing and customer acquisition, and will get a seat on ADT's board, the WSJ report said, citing people familiar with the matter. The WSJ report also said Alphabet Inc.'s Google previously spent $450 million for a 6.6% stake in ADT, and committed $150 million toward engineering, designing and marketing of new products. ADT's stock has lost 14.3% year to date through Friday, while the S&P 500 has dropped 17.7%.
(END) Dow Jones Newswires
September 06, 2022 08:39 ET (12:39 GMT)
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