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ADT Divests Commercial Business

 ADT Divests Commercial Business, Doubles Down on Smart Sustainable and Secure Homes

The last five years have been marked by dramatic changes in the security solutions market, and ADT keeps evolving along with it. Since 2018, ADT has changed its interactive services platform, its panels, and its installation options. It has entered investment partnerships with Google ($600M investment) and State Farm ($1.2 Billion investment) that are fueling the company’s transformation. It also acquired Sunpro Solar. And, today, ADT announced it is divesting its Commercial fire and security segment (ADTC) for $1.6 Billion to private equity firm GTCR. The new venture will be led by former Protection 1 executives Dan Bresingham, and Tim Whall.

This move to divest its commercial business underscores ADT’s focus on building and expanding its residential business.  ADT is a powerhouse player in the residential smart security space. Parks Associates Q2 2023 data finds that 37% of households with a professionally monitored security system report ADT as their security provider. Brands expanding out of their DIY origins are in hot pursuit: Ring is now in second place and SimpliSafe in fourth, as providers of professionally monitored systems.


With the large investments from Google and StateFarm, we anticipate ADT to continue to introduce new offerings into the market that extend beyond traditional security solutions.  The interactive services and connected devices attached to systems give new value and meaning to consumers, and new revenue opportunities for ADT. ADT sees energy generation and management in the home as a particularly promising area of opportunity. ADT Solar launched in late 2021 and while installs are down currently due to inflation and high interest rates, the segment accounted for $78M of ADT’s revenue in Q2 2023.    

Finally, ADT continues to see opportunity beyond single-family homes, and will retain its operations in the multifamily property and small business markets. ADT acquired leading multifamily IoT platform, IOTAS in 2022 to accelerate its penetration of that growing market. In the SMB space, Parks Associates data reveals that a wide variety of connected security features are appealing to SMBs.

% of SMBs Finding Connected Security Feature Appealing:
•    68% - Alert of unauthorized access
•    57% - Detect employee arrival/departure
•    57% - Alert of inappropriate customer behavior
•    53% - AI verification to reduce false alarms

ADT’s divestiture will enable the company to focus even more strongly on its residential business and growing its share amidst strong competition from DIY players. For ongoing tracking of the residential security market and competitive trends, see Parks Associates Residential Security Dashboard

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