Resideo to Separate ADI Distribution Operations, Forming Two Standalone Public Entities
Resideo Technologies (NYSE: REZI) has announced plans to separate its ADI Global Distribution business into an independent public company, a move aimed at unlocking value, enhancing operational performance, and increasing strategic flexibility.
ADI, a global wholesale distributor of low-voltage products, including security and audio-visual solutions, will continue to serve both residential and commercial markets. The company's portfolio includes over 500,000 products across categories such as security, audio-visual, access control, and smart home automation. ADI's offerings also include proprietary technologies and exclusive brands like Control4, OvrC, Araknis Networks, and WattBox.
For the same 12-month period, ADI reported $4.5 billion in net revenue with a segment adjusted EBITDA margin of 7.5%. Rob Aarnes will remain president of ADI post-separation.
Resideo's Products & Solutions (P&S) segment, on the other hand, will focus on residential controls and sensing solutions under brands such as Honeywell Home, First Alert, Braukmann, and BRK. The P&S segment claims a network of 100,000 professional installers and more than 15 million installations per year. Tom Surran will continue to lead Resideo's P&S business post-separation.
The spin-off is expected to be completed in the second half of 2026, subject to customary conditions and regulatory approvals. Jay Geldmacher, Resideo's President and CEO, stated that the separation builds on operational progress that has made each segment capable of standing independently.
The transaction will terminate the company's obligation to make annual payments of up to $140 million through 2043, following the completion of the transaction. Geldmacher will retire and serve in an advisory role for six months.
Resideo's advisors for the transaction include Evercore for financial matters, Willkie Farr & Gallagher LLP as legal counsel, and Collected Strategies for strategic communications. Resideo expects its second quarter 2025 financial results to exceed the high end of its previously announced guidance. The company plans to release its full second quarter financial results and updated annual outlook on August 5.
In addition, Resideo will make a one-time payment of $1.59 billion to Honeywell in the third quarter of 2025 to eliminate all future monetary obligations under an existing indemnification and reimbursement agreement.
The spin-off is designed as a natural evolution reflecting the maturity and operational readiness of both entities, offering them the opportunity to unlock their full potential and deliver greater value to shareholders, customers, and partners alike. The potential impacts include value creation for shareholders, improved operational focus, market leadership reinforcement, and strategic flexibility for each company.
[1] Resideo Press Release, "Resideo to Spin Off ADI Global Distribution as Independent Public Company," 2025. [3] Resideo Investor Presentation, "ADI Global Distribution Spin-off," 2025. [5] Resideo Earnings Call Transcript, Q1 2025.
- The spin-off of ADI Global Distribution, a business under Resideo Technologies, will allow it to operate as an independent public company, seeking to enhance operational performance, unlock value, and increase strategic flexibility, especially within the finance, business, and industry sectors.
- Post-separation, ADI Global Distribution will continue to offer products and services in the low-voltage industry, such as security, audio-visual solutions, and smart home automation, while Resideo's Products & Solutions segment will focus on residential controls and sensing solutions across categories like Honeywell Home, First Alert, and others, catering to a network of professional installers.
