Home security giant ADT is evolving from a security company to a smart home company, with around 80% of its revenue coming from its smart home business, said its president and CEO Jim DeVries during a ROTH Capital webinar held last week (19 January).
In November last year, ADT entered the US rooftop solar PV market with the acquisition of Sunpro Solar, rebranding the company as ADT Solar, in a deal worth roughly US$825 million.
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While PV Tech Premium has already reported extensively on the deal and what it means through an interview with ADT chief customer officer (CCO) Jamie Haenggi, DeVries’ comments last week provide further insight into the US company’s development plans.
“We want to be the largest residential solar company in the US,” DeVries said when asked about his ambitions for ADT Solar.
Before the acquisition, Sunpro had been doubling its business every year and, while he recognises the difficulty in continuing this growth path given “the law of large numbers”, DeVries believes the cross-selling opportunities ADT can provide can help continue that impressive growth rate.
One way of achieving this is via further US expansion. Sunpro operated in 22 US states, mostly concentrated in the South and South-East of the country, DeVries said. Texas is its largest market, followed by Florida, he noted, adding that California made up just 2% of its total installs, so they were not concerned about new, contentious net metering laws.
This expansion will come through a combination of “organic growth and mergers and acquisitions (M&A)”, DeVries said. “Most future growth will come organically but we’re contemplating M&A to accelerate growth in key markets.”
Meanwhile, there is no intention to change Sunpro’s business model now that it is ADT Solar. “ADT solar will be operating somewhat autonomously” and there “won’t be a deep integration”, said DeVries.
Its current funding model is about 90% loans versus 10% cash, he said, adding there were no plans to change the financing structure in the near term as “the model is working for us”.
Finally, ADT’s 5,000 US employees will not be conducting solar installs and vice versa, with the 4,000 former Sunpro workers not expected to provide home security services.
The company has an upcoming investor day this quarter.
