Newell Brands has signed a definitive agreement to sell the Connected Home & Security business, including the First Alert brand, to Resideo Technologies, the company has announced.
Newell stated that it expects the transaction proceeds to be $593 million, subject to customary working capital and transaction adjustments, which the company will put toward debt paydown and share repurchase, with the goal of maintaining its current leverage ratio. The company’s board of directors has authorized a $375 million share repurchase program that goes into effect immediately. Newell expects the transaction to have an approximately neutral impact on its normalized earnings per share in 2022, considering the anticipated use of proceeds.
“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 realize its full potential,” said Ravi Saligram, Newell Brands president and CEO, in announcing the divestiture. “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.”
