- Resideo Technologies, Inc. (NYSE: REZI) has announced it is buying First Alert from Newell Brands Inc. (Nasdaq: NWL) for $593 million in cash. These are the details.
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 — announced that it has entered into a definitive agreement to acquire First Alert, a leading provider of home safety products, from Newell Brands Inc. (Nasdaq: NWL) for $593 million in an all-cash transaction, or about $547 million net of expected future tax benefits.
Launched 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 home builders. And 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, fire extinguishers, and other suppression solutions. Products are marketed through the First Alert, BRK, and Onelink brands.
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 the 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.
KEY QUOTES:
“The addition of First Alert to the Resideo portfolio provides a highly complementary extension of our existing sensor solutions in the home. 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.”
— Jay Geldmacher, Resideo CEO
