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Resideo will acquire Snap One

Resideo adquirirá a Snap One

International. Resideo has agreed to acquire Snap One for $10.75 per share in cash, representing a transaction value of approximately $1.4 billion. Following closing, Snap One will be integrated into Resideo's global ADI distribution business.

The transaction will combine ADI's strong position in the distribution of security products and Snap One's complementary capabilities in the smart life market and innovative Control4 technology platforms, which are expected to drive greater value for integrators and financial returns.

Together, ADI and Snap One will provide integrators with a greater selection of third-party products and proprietary offerings through a broad physical branch presence augmented by industry-leading digital capabilities.

"The acquisition of Snap One is an exciting step in Resideo's ongoing transformation through portfolio optimization, operational improvements and structural cost-saving actions," said Jay Geldmacher, president and chief executive officer of Resideo. "ADI and Snap One are highly complementary businesses and together will significantly enhance our strategic and operational capabilities as a major player in attractive growth categories. We are excited about the enhanced value proposition through increased product variety, local availability, support services, and extensive market expertise, as well as the future opportunities this creates for integrators serving the residential and commercial markets."

- Publicidad -

John Heyman, CEO of Snap One, said: "This is the right next step in capturing new opportunities to bring our solutions to market. The future of intelligent life is here. The demand for connected technology products continues to grow and Resideo is the right owner to fuel our expansion. We believe this transaction will deliver compelling value to our stakeholders and create opportunities for our people and integrative partners."

Nathan Sleeper, CEO of CD&R, said, "We are excited to support Resideo in this highly strategic acquisition and ongoing transformation. I look forward to joining Resideo's board of directors and supporting the business as it executes this transaction and the significant opportunity we see available in the coming years."

Transaction Details
The transaction is valued at approximately $1.4 billion, including Snap One's expected net debt at closing of approximately $460 million.

This represents a multiple of 7.4 times Snap One's adjusted EBITDA for the 12 months ended December 29, 2023, further adjusted by including Resideo's projected annual run rate synergies of $75 million.

The transaction is expected to be completed in the second half of 2024 and is subject to customary closing conditions, including receipt of antitrust and other applicable regulatory approvals.

The transaction has been unanimously approved by the boards of directors of Resideo and Snap One. The private investment funds managed by Hellman & Friedman LLC, which owns approximately 72% of the outstanding common shares of Snap One, have signed a written consent to approve the merger, thereby providing the required shareholder approval for the transaction.

Resideo intends to use proceeds from committed debt financing, cash on hand and a $500 million perpetual convertible preferred equity investment from Clayton, Dubilier & Rice LLC to fund the transaction.

- Publicidad -

The terms of the CD&R investment include a 7% coupon, payable in cash or in kind, at Resideo's option, and a conversion price of $26.92. Upon closing, CD&R will have the right to appoint two members to Resideo's Board of Directors.

Benefits of the transaction
The acquisition will combine Snap One's capabilities for smart life integrators with ADI's complementary position in the distribution of adjacent security products. This cross-category expansion will allow the combined organization to materially deepen relationships with integrators to better serve their customers and expand their businesses.

Expansion of the patented offering
The combination is expected to significantly accelerate ADI's existing exclusive brands strategy, leveraging Snap One's award-winning proprietary product portfolio and product development expertise, while providing greater availability through ADI's network of commercial and residential integrators and omnichannel capabilities.

The combined company aims to tap into greater opportunities around innovation to drive value for integrators through a portfolio of proprietary products. Snap One generated 66% of proprietary product sales in 2023, and these offerings typically have a significantly higher gross margin than third-party products.

Enhanced integrator value proposition
Professional integrators at ADI and Snap One will benefit from significant go-to-market synergy with Snap One's e-commerce expertise and integrator support platforms and ADI's 195 storage locations and extensive digital capabilities.

The combination is expected to create a true omnichannel experience for integrators, simplifying the shopping experience and improving product availability. There is an additional opportunity to enhance value within Control4's integrator base by increasing service levels, rapid product fulfillment, and expanding exclusive offerings.

- Publicidad -

Attractive financial profile
The transaction is expected to increase Resideo's non-GAAP EPS in the first full year of ownership, with favorable revenue growth and margin profile for ADI and Resideo as a whole. The transaction finance has been structured to allow Resideo to preserve financial flexibility for future strategic initiatives.

Álvaro León Pérez Sepúlveda
Author: Álvaro León Pérez Sepúlveda
Editor - Latin Press, Inc.
Comunicador Social Periodista egresado de la Universidad de Antioquia, con más de 14 años de experiencia en medios periodísticos y proyectos de comunicación digital. [email protected]

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