Resideo Technologies to acquire smart-living solutions provider Snap One Holdings Corp. for $1.4bn

In a strategic move valued at approximately $1.4 billion, Resideo Technologies, Inc. (NYSE: REZI) has agreed to acquire Snap One Holdings Corp. (Nasdaq: SNPO). This acquisition, inclusive of net debt, aims to consolidate Resideo’s position in the technology-driven product market by integrating Snap One into its ADI Global Distribution business, enhancing the service and product range available to professional integrators.

Resideo Technologies will acquire Snap One at $10.75 per share in cash. This transaction reflects a 7.4x multiple on Snap One’s adjusted EBITDA for the past twelve months as of December 29, 2023, and includes projected annual run-rate synergies of $75 million. The acquisition is financed through committed debt, cash on hand, and a $500 million investment from Clayton, Dubilier & Rice LLC, which will also provide CD&R the right to appoint two board members at Resideo post-transaction.

The merger is expected to enhance both Resideo’s and Snap One’s market positions by combining their strengths in security product distribution and smart living solutions, respectively. The integration will provide a broader product offering and enhanced distribution capabilities, expected to be accretive to Resideo’s non-GAAP EPS in the first full year post-acquisition. Moreover, Snap One’s e-commerce and product development capabilities will augment ADI’s extensive physical and digital distribution network, creating a robust omni-channel platform for integrators.

Jay Geldmacher, President and CEO of Resideo, emphasized the acquisition’s alignment with the company’s strategic goals, stating, “The acquisition of Snap One is an exciting step in Resideo’s continued transformation through portfolio optimization, operational enhancements and structural cost savings actions.” John Heyman, CEO of Snap One, also supported the merger, highlighting the future growth opportunities in the smart living sector. Nathan Sleeper, CEO of CD&R, expressed enthusiasm about supporting Resideo in this transformative phase.

This acquisition positions Resideo to capitalize on the growing demand for integrated smart technology solutions in both residential and commercial markets. By merging Snap One’s innovative technology platforms, such as Control4, with ADI’s strong distribution network, Resideo aims to offer an enhanced value proposition to its customers and stakeholders, leveraging substantial business and financial synergies.

The merger between Resideo Technologies and Snap One Holdings Corp. represents a significant consolidation in the smart home and security products market. This strategic alignment is poised to create a powerhouse of smart technology distribution, potentially setting a new standard for integration and customer service in the industry. As smart home technologies become increasingly essential in modern living, such mergers are critical for companies seeking to remain competitive and innovative in a rapidly evolving market.