- Transaction expands and leverages Resideo's footprint in the
home with complementary fire and carbon monoxide detection and fire
suppression products
- Enhances presence across retail and professional channels
- Highly recognizable and respected First Alert® and
BRK® brands
- Significant cost synergies targeted with $30 million in identified annual savings
SCOTTSDALE, Ariz., Feb. 7, 2022 /PRNewswire/ -- Resideo
Technologies, Inc. (NYSE: REZI), a leading global provider of home
comfort and security solutions and distributor of commercial and
residential security and audio-visual products, today announced
that it has entered into a definitive agreement to acquire First
Alert, Inc., a leading provider of home safety products, from
Newell Brands Inc. (Nasdaq: NWL) for $593
million in an all cash transaction, or approximately
$547 million net of expected future
tax benefits.
Established in 1969 and based in Aurora, Illinois, First Alert is a leader in
the home safety market with a strong omni-channel presence serving
end users directly through retail and e-commerce channels and
professional contractors through relationships with distributors
and homebuilders. First Alert offers a comprehensive portfolio of
detection and suppression devices including smoke alarms, carbon
monoxide (CO) alarms, combination alarms, connected fire and CO
devices, and fire extinguishers and other suppression solutions.
Products are marketed through the First Alert, BRK and
Onelink® brands.
"The addition of First Alert to the Resideo portfolio provides a
highly complementary extension of our existing sensor solutions in
the home," commented Jay Geldmacher,
Resideo CEO. "Not only does First Alert bring a leading brand and
market position in home safety, but its products also occupy a
highly strategic position on the ceiling.
"We see significant operational synergies with First Alert's
strength in retail and relationships with leading homebuilders and
Resideo's strong partnership with professional contractors and
distributors. First Alert advances our strategy of expanding
Resideo's presence with contractors and broadening our suite of
sensors for the home."
Financial and Closing Details
- For the year ended December 31,
2021, First Alert generated approximately $395 million of sales and adjusted EBITDA of
approximately $55 million.
- Resideo is targeting $30 million
in annual cost synergies by the end of 2023 from the integration of
manufacturing and distribution operations, and general operational
and business support efficiency efforts.
- Resideo expects to realize approximately $46 million in net present value of tax benefits
as a result of making a joint election with Newell under Section
338(h)(10) of the Internal Revenue Code, which treats the majority
of the transaction as an asset purchase for tax purposes.
- Net of the present value of the anticipated acquired tax
benefits and including expected cost synergies, the purchase price
represents a multiple of approximately 6.4x 2021 adjusted
EBITDA.
- First Alert has over 2,800 employees and its operations include
manufacturing in Juarez, Mexico,
and a primary distribution facility in El
Paso, Texas.
- The transaction is expected to be completed in the first
quarter of 2022, and is subject to customary closing conditions,
including receipt of applicable regulatory approvals.
Resideo Preliminary Fourth Quarter 2021 Financial
Results
For the quarter ended December 31,
2021, Resideo's preliminary expectations include revenue of
$1.454 billion, gross margin of 27.2%
and operating profit of $141 million.
Resideo will release full fourth quarter and full year 2021
financial results after the close of the New York Stock Exchange on
Tuesday, February 15, and host a
webcasted conference call at 5 p.m.
ET. Additional details on the acquisition will be provided
at that time.
About Resideo
Resideo is a leading global manufacturer and distributor of
technology-driven products and solutions that provide comfort,
security, energy efficiency and control to customers worldwide.
Building on a 130-year heritage, Resideo has a presence in more
than 150 million homes, with 15 million systems installed in homes
each year. We continue to serve more than 110,000 professionals
through leading distributors, including our ADI Global
Distribution business, which exports to more than 100
countries from nearly 200 stocking locations around the world. For
more information about Resideo, please visit www.resideo.com.
About Newell Brands
Newell Brands (NASDAQ: NWL) is a
leading global consumer goods company with a strong portfolio of
well-known brands, including Rubbermaid, FoodSaver, Calphalon,
Sistema, Sharpie, Paper Mate, Dymo, EXPO, Elmer's, Yankee Candle,
Graco, NUK, Rubbermaid Commercial Products, Spontex, Coleman,
Campingaz, Contigo, Oster, Sunbeam and Mr. Coffee. Newell Brands' beloved, planet friendly brands
enhance and brighten consumers lives at home and outside by
creating moments of joy, building confidence and providing peace of
mind.
Resideo
Contacts:
|
|
Investors:
|
Media:
|
Jason
Willey
|
Bruce Eric
Anderson
|
investorrelations@resideo.com
|
bruce.e.anderson@resideo.com
|
|
|
Newell Brands
Contacts:
|
|
Investors:
|
Media:
|
Sofya
Tsinis
|
Beth
Stellato
|
VP, Investor
Relations
|
VP, Corporate
Communications
|
+1 (201)
610-6901
|
+1 (470)
580-1086
|
sofya.tsinis@newellco.com
|
beth.stellato@newellco.com
|
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, uncertainties, and other factors,
which may cause the actual results or performance of the Company to
be materially different from any future results or performance
expressed or implied by such forward-looking statements. Such risks
and uncertainties include, but are not limited to, (1) the ability
to timely satisfy the conditions to the closing of the First Alert
transaction and the timing for the consummation thereof, (2) our
ability to achieve the targeted amount of annual cost synergies and
the expected net present value of tax benefits resulting from the
First Alert transaction, (3) our ability to integrate the First
Alert business into Resideo and realize the anticipated strategic
benefits of the transaction, including the anticipated operational
synergies and expansion of our presence with contractors and the
suite of sensor products for the home, (4) our actual results for
the fourth quarter ended December 31, 2021 differing from
the estimated financial results included in this press release,
including due to the completion of our financial closing
procedures, final adjustments and other developments that may arise
between the date of this press release and the time that financial
results for the fourth quarter of 2021 are finalized, (5) the
duration and severity of the COVID-19 pandemic and the disruption
to our business and the global economy caused by it, including (A)
its effect on the demand for our products and services, (B) its
effect on our and our business partners' supply chains, workforce,
liquidity, spending and timing for payments and disbursements, and
(C) the impact of potential facility closures and the modified
working conditions at our corporate offices, Product &
Solutions segment and ADI Global Distribution segment, (6) 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, (7) the likelihood of continued
success of our transformation programs and initiatives, (8) whether
the settlement of our pending securities class action litigation
will become effective and finally approved by the court on the
terms previously announced, and (9) 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, 2020 and other periodic filings we make
from time to time with the Securities and Exchange Commission
(SEC). You are cautioned not to place undue reliance on these
forward-looking statements. 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.