Resideo Completes Acquisition of Snap One
Resideo Technologies has completed its acquisition of Snap One for $1.4 billion, aiming to enhance its presence in the smart living market. The integration of Snap One into Resideo's ADI Global Distribution segment is expected to expand product offerings and digital capabilities. The acquisition is anticipated to be accretive to Resideo's non-GAAP Adjusted EPS in 2025, with expected synergies of $75 million by 2027. Additionally, investment funds managed by Clayton, Dubilier & Rice completed a $500 million convertible preferred stock investment in Resideo. As part of the transaction, Nate Sleeper and John Stroup from CD&R have joined Resideo's Board of Directors.
- Resideo completed the acquisition of Snap One for $1.4 billion.
- Acquisition expected to be accretive to Resideo's non-GAAP Adjusted EPS in 2025.
- Annual run-rate synergies of approximately $75 million expected by 2027.
- Snap One integration to enhance product offerings and digital capabilities.
- Investment funds managed by affiliates of CD&R completed a $500 million convertible preferred stock investment in Resideo.
- Nate Sleeper and John Stroup from CD&R joined Resideo's Board of Directors.
- The acquisition deal includes Snap One's net debt, potentially affecting Resideo's balance sheet.
- The $500 million convertible preferred stock investment could dilute existing shareholders' equity.
Insights
The acquisition of Snap One by Resideo Technologies is a significant move from both a financial and strategic perspective. By acquiring Snap One for
Accretive means the acquisition will add to Resideo’s earnings per share, a positive sign for shareholders. The anticipated synergies could come from integrating operations, streamlining processes and leveraging Snap One's existing distribution channels. These benefits align with Resideo's goal of accelerating profitable growth.
From a retail investor's perspective, this acquisition signals Resideo’s commitment to growth and innovation. By incorporating Snap One's product line and capabilities, Resideo can better compete in the burgeoning smart home market, which is poised for substantial growth. Investors should monitor the upcoming earnings call for updated guidance and specific financial impacts.
On the market front, the acquisition of Snap One by Resideo significantly bolsters its position in the smart living market. Snap One specializes in the distribution of smart home products and has an extensive network of professional integrators. This move strategically integrates Snap One’s innovative Control 4 and home automation offerings into Resideo’s existing ADI Global Distribution segment.
The smart home market is rapidly expanding with increasing consumer demand for connected devices that offer convenience, security and energy efficiency. By merging with Snap One, Resideo is enhancing its portfolio with higher-margin proprietary products and services, which can drive better profitability margins overall. This acquisition will likely increase Resideo’s market share and provide a broader customer base, potentially leading to increased revenue streams.
For retail investors, the expanded product line and enhanced customer base could mean a stronger competitive position for Resideo in one of the fastest-growing tech markets. The strategic fit of Snap One’s product offerings with Resideo's existing distribution channels is expected to support sustained growth in the future.
From a technology perspective, the merger of Resideo and Snap One is particularly intriguing. Snap One is known for its advanced Control 4 home automation systems, which provide integrators with innovative solutions for smart living. These systems include sophisticated features for home security, audio-visual systems and comprehensive home automation, allowing for seamless integration of various smart devices.
Integrating these technologies into Resideo’s ecosystem enhances its product suite and adds significant value for customers. This strategic move could lead to the development of more advanced, integrated smart home solutions, appealing to tech-savvy consumers looking for a unified system to manage their home environments. Additionally, leveraging Snap One’s digital capabilities can improve Resideo's online presence and service offerings.
For tech-oriented retail investors, this acquisition represents an alignment with advancing IoT (Internet of Things) trends and a commitment to innovation, which could lead to long-term growth and a stronger market presence.
Expands Presence in Smart Living Products and Distribution
Enhances Resideo's growth and margin profile and accretive to non-GAAP Adjusted EPS in first full year of ownership
Welcomes Nate Sleeper and John Stroup of Clayton, Dubilier & Rice LLC to Board of Directors
As previously communicated, the all-cash transaction was for
"We are pleased to complete this transaction and excited to officially welcome the Snap One team to Resideo," commented Jay Geldmacher, Resideo's President and Chief Executive Officer. "This is an important step in our ongoing transformation across Resideo as we focus on accelerating profitable growth. Snap One's expertise serving smart living integrators and innovative Control 4 and home automation offerings immediately expand Resideo's capabilities across security, audio visual and smart living markets. The combination better positions the business in attractive growth categories, adds new higher-margin proprietary products and services, and broadens ADI's customer base. Resideo's future is bright as we work to simplify the connected world, creating value for our customers and shareholders."
Resideo continues to expect annual run-rate business and financial synergies of approximately
In connection with the closing of the Snap One transaction, as previously announced, investment funds managed by affiliates of Clayton, Dubilier & Rice LLC completed their
About Resideo
Resideo is a leading global manufacturer and developer of technology-driven products and components that provide critical comfort, energy management, and safety and security solutions to over 150 million homes globally. Through our ADI Global Distribution business, we are also a leading wholesale distributor of professionally installed electronic security and life safety products for commercial and residential markets and serve a variety of adjacent product categories including audio visual, data communications, and smart home solutions. For more information about Resideo, please visit www.resideo.com.
Contacts: | |
Resideo Investors: | Resideo Media: |
Jason Willey | Adrienne Zimoulis |
Vice President, Investor Relations | Sr. Director of Communications |
Forward-Looking Statements
This release contains "forward-looking statements." All statements, other than statements of fact, that address activities, events or developments that we or our management intend, expect, project, believe or anticipate will or may occur in the future are forward-looking statements. Although we believe forward-looking statements are based upon reasonable assumptions, such statements involve known and unknown risks and uncertainties, which may cause the actual results or performance of the Company to differ materially from such forward-looking statements. Such risks and uncertainties include, but are not limited to, (1) our ability to achieve our outlook regarding the second quarter 2024 and full year 2024, (2) our ability to recognize the expected savings from, and the timing and impact of, our existing and anticipated cost reduction actions, and our ability to optimize our portfolio and operational footprint (3), the amount of our obligations and nature of our contractual restrictions pursuant to, and disputes that have or may hereafter arise under the agreements we entered into with Honeywell in connection with our spin-off, (4) risks related to our recently completed acquisitions including our ability to achieve the targeted amount of annual cost synergies and successfully integrate the acquired operations (including successfully driving category growth in connected offerings), (5) the ability of Resideo to drive increased customer value and financial returns and enhance strategic and operational capabilities as a result of the completion of the Snap One transaction, (6) the ability of to achieve the targeted amount of synergies and the related valuation implications arising from the Snap One transaction, (7) the accretive nature of the Snap One transaction to Resideo's non-GAAP EPS in the first full year of ownership and the growth and margin profile of the combined businesses, (8) the ability to accelerate brand strategy as a result of the Snap One transaction, (9) the ability to integrate the Snap One business into Resideo and realize the anticipated strategic benefits of the transaction, including the anticipated operational and strategic benefits of the transaction, and (10) the other risks described under the headings "Risk Factors" and "Cautionary Statement Concerning Forward-Looking Statements" in our Annual Report on Form 10-K for the year ended December 31, 2023 and other periodic filings we make from time to time with the Securities and Exchange Commission. Forward-looking statements are not guarantees of future performance, and actual results, developments, and business decisions may differ from those envisaged by our forward-looking statements. Except as required by law, we undertake no obligation to update such statements to reflect events or circumstances arising after the date of this press release and we caution investors not to place undue reliance on any such forward looking statements.
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SOURCE Resideo Technologies, Inc.
FAQ
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