Resideo’s Stock Declines After Acquiring Snap One, Smart-Home Firm

Resideo Technologies (REZI), a smart-home firm based in Scottsdale, Arizona, announced on Monday that they have reached an agreement to acquire Snap One (SNPO), an industry peer based in Charlotte, North Carolina, in a deal valued at $1.4 billion, including debt. The acquisition was met with enthusiasm from Snap One investors, causing a surge in Snap One shares, while Resideo stock experienced a decline in value.

Resideo will be purchasing Snap One for $10.75 per share in cash. The merger of the two companies is expected to establish a strong presence in security, audio visual, and smart living technology distribution for both residential and commercial markets. Resideo’s CEO, Jay Geldmacher, expressed excitement about the acquisition, stating that it marks a significant step in Resideo’s ongoing transformation through strategic portfolio optimization, operational improvements, and structural cost-saving measures.

Since Geldmacher took over as CEO of Resideo in May 2020, the company has engaged in a series of acquisitions and divestitures. One of the recent acquisitions was the purchase of home safety products firm First Alert from Newell Brands for $593 million in cash. Resideo’s product portfolio includes a range of smart home devices such as thermostats, security cameras, smoke alarms, water leak detectors, and more. The company’s stock experienced a breakout in February 2022 after reporting better-than-expected sales and earnings for the fourth quarter.

Investors can follow Patrick Seitz on Twitter at @IBD_PSeitz for more updates on consumer technology, software, and semiconductor stocks. Additionally, they can access MarketSurge for comprehensive research, charts, data, and coaching in one place. Resideo stock has shown resilience, despite recent market fluctuations, and continues to establish itself as a key player in the smart home technology sector.