US-based consumer goods company Newell Brands has agreed to sell its Connected Home & Security (CH&S) business to home comfort and security solution provider Resideo Technologies.
Based in Aurora, Illinois, CH&S manufactures and distributes smoke and carbon monoxide combination alarms, fire suppressants, fireproof safes and other home safety products under the BRK and First Alert brands.
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Newell Brands said that the business has a ‘strong’ presence in both retail and commercial channels, registering around $395m in net sales last year.
The deal value is subject to customary working capital and transaction adjustments and is expected to be worth $593m.
Newell Brands president and CEO Ravi Saligram said: “We are confident that Resideo is the right strategic owner for CH&S, as they have a presence in more than 150 million homes, and we believe this transaction will allow the business to realise its full potential.
“At the same time, it enables the Newell Brands team to bring even greater focus to categories where we see the highest potential for value creation through our core capabilities.”
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By GlobalDataThe transaction is anticipated to close by the end of the first quarter of this year subject to customary closing conditions, including regulatory approval.
The divestiture is expected to have an approximately neutral impact on Newell Brands’ normalised earnings per share (EPS) for this year.
JP Morgan Securities served as a financial advisor to Newell Brands for the transaction.
Resideo currently has a presence in more than 150 million homes, with 15 million of its systems installed in homes each year.
Resideo CEO Jay Geldmacher said: “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.”
