Resideo Plans to Acquire Snap One
Resideo Acquires Snap One for $1.4 Billion in Cash
In a significant move, Resideo, a leading provider of home comfort and security solutions, has announced its acquisition of Snap One for approximately $1.4 billion in cash. The deal, which was arranged by Resideo's corporate leadership and advised by Evercore, is expected to close in April 2024.
This acquisition is a strategic step in Resideo's continued transformation. It aims to provide financial flexibility as the company continues to optimize its portfolio. Jay Geldmacher, Resideo's president and CEO, expressed his excitement about the enhanced value proposition this creates for integrators serving residential and commercial markets.
Snap One, an industry leader in smart technology, generated 66% of its sales from proprietary products in 2023. These proprietary offerings typically carry significantly higher gross margins than third-party products. Upon closing, Snap One will integrate into Resideo's ADI Global Distribution business.
The combination of ADI and Snap One is expected to create a true omni-channel experience for integrators. It will simplify the buying experience and enhance product availability, providing integrators an increased selection of both third-party products and proprietary offerings.
The acquisition combines ADI's strong position in security products distribution with Snap One's capabilities in the smart living market and Control4 technology platforms. This union is expected to drive increased value for integrators and financial returns.
The transaction will be augmented by industry-leading digital capabilities, aiming to leverage increased opportunities around innovation to drive value for integrators through a pipeline for proprietary products. The combination of ADI and Snap One is also expected to meaningfully accelerate ADI's existing exclusive brands strategy.
Jay Geldmacher also highlighted the anticipated benefits for Snap One's customers, stating that the transaction will deliver seamless experiences to consumers and high-quality services to integrators. He expressed his belief that the combination will be a significant step forward in Resideo's mission to make homes safer, more comfortable, and more efficient.
The acquisition of Snap One by Resideo is expected to be accretive to Resideo's non-GAAP EPS in the first full year of ownership. The transaction financing has been structured to allow Resideo to preserve financial flexibility for future strategic initiatives.
In conclusion, the acquisition of Snap One by Resideo marks a significant milestone in the company's ongoing transformation. It is expected to bring about operational enhancements, structural cost savings actions, and most importantly, provide a better experience for integrators and consumers alike.
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