Resideo Finalizes Deal To End Honeywell Payments, Announces Q2 Outlook, Plans To Divest ADI Business

(RTTNews) - Resideo Technologies, Inc. (REZI), Wednesday announced that it has entered into a definitive agreement with Honeywell International Inc. (HON) to accelerate and eliminate all future monetary obligations under the Indemnification and Reimbursement Agreement.

As per the terms of the deal, Resideo will make a one-time cash payment of $1.59 billion to Honeywell in the third quarter of 2025.

Upon the closing of the deal, the Indemnification Agreement will terminate, resulting in the elimination of Resideo's obligation to make annual payments to Honeywell of upto $140 million through year-end 2043.

The company intends to finance the payment to Honeywell through a combination of approximately $400 million of cash-on-hand and new senior secured debt financing.

Additionally, the company also announced financial outlook for the second quarter, expecting revenue of $1.805 to $1.855 billion, and adjusted earnings of $0.51 to $0.61 per share.

Analysts, on average, project revenue of $1.83 billion, and earnings of $0.54 per share for the same quarter.

In a separate statement, Resideo announced its intention to separate its ADI Global Distribution business through a tax-free spin-off to Resideo shareholders.

Following the separation, Resideo's Products & Solutions business will continue to operate as Resideo, and ADI will become an independent public company.

The company expects the separation to unlock full potential of both businesses, enhancing interests of all stakeholders.

Also, CEO Jay Geldmacher's previously announced retirement will now become effective upon completion of the separation. Following this, Tom Surran, President of P&S, and Rob Aarnes, President of ADI, will continue leading Resideo and ADI, respectively.

In the pre-market hours, REZI is moving down 3.22 percent, to $23.76 on the New York Stock Exchange.