Resideo Technologies, Inc. completed the acquisition of First Alert, Inc. from Newell Brands Inc. for $620 million.
March 30, 2022
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Resideo Technologies, Inc. (NYSE:REZI) entered into a definitive agreement to acquire First Alert, Inc. from Newell Brands Inc. (NasdaqGS:NWL) for approximately $590 million on February 6, 2022. The purchase price of $593 million is payable in cash and is subject to adjustment based on the amount of working capital and net indebtedness of the business. As of February 15, 2022, Resideo intends to fund this acquisition with a combination of cash on hand, and incremental borrowings under its term loan facility. As of March 28, 2022, Resideo entered into a First Amendment to Amended and Restated Credit Agreement pursuant to which, the company obtained incremental term loans in an aggregate principal amount of $200 million. The proceeds of the First Amendment Term Loans may be used to finance (in part) the pending acquisition of First Alert, to pay to fees and expenses related to the Amendment, and for working capital and general corporate purposes. The purchase price represents a multiple of approximately 6.4x 2021 adjusted EBITDA. First Alert recorded approximately $395 million of sales and adjusted EBITDA of approximately $55 million for the year ended December 31, 2021.
The transactions is subject to the satisfaction or waiver of customary closing conditions for both parties, including the expiration or termination of the waiting period, including any extension thereof, under the Hart-Scott Rodino Antitrust Improvements Act of 1976, as amended, and the receipt or continued effectiveness of certain third party consents, and no law being enacted, entered, promulgated or enforced by any governmental authority of competent jurisdiction that prevents or makes illegal the consummation of the transactions. It is also subject to customary closing conditions, including receipt of applicable regulatory approvals. The transaction has been approved by the Board of Directors for each company. The transaction is expected to be completed in the first quarter of 2022. As of February 7, 2022, the transaction is expected to be completed by the end of the first quarter of 2022. The company anticipates using the after-tax proceeds of the transaction toward both debt paydown and share repurchase, with the goal of maintaining the company's current leverage ratio.
Russell L. Leaf, Jonathan Kubek, Victor Okasmaa, Christopher Peters, Geri Anne McEvoy and Eugene Chang of Willkie Farr & Gallagher LLP acted as legal advisors for Resideo. Darcy White of Jones Day acted as legal advisor for Newell. J.P. Morgan Securities LLC acted as financial advisor for First Alert and Newell while Centerview Partners LLC acted as financial advisor for Resideo.
Resideo Technologies, Inc. (NYSE:REZI) completed the acquisition of First Alert, Inc. from Newell Brands Inc. (NasdaqGS:NWL) for approximately $620 million on March 31, 2022. The purchase price of $613 million is payable in cash and net of cash acquired of $2 million.
Newell Brands Inc. is a global consumer goods company. The Company operates in three segments: Home and Commercial Solutions, Learning and Development, and Outdoor and Recreation. The products offered under Home and Commercial Solutions segment includes commercial cleaning and maintenance solutions; closet and garage organization; hygiene systems and material handling solutions; household products, including kitchen appliances; food and home storage products; vacuum sealing products; gourmet cookware, bakeware and cutlery and home fragrance products. The Learning and Development segment offers products in baby gear and infant care products; writing instruments, including markers and highlighters, pens and pencils; art products; activity-based products and labeling solutions. The Outdoor and Recreation segment offers products for outdoor and outdoor-related activities. Its brands include Rubbermaid, Sharpie, Graco, Coleman, Yankee Candle, Yankee Candle, and Paper Mate, among others.