Resideo Technologies to Pay $1.59 Billion to Honeywell

By Bobby Samwell • Wednesday, July 30 15:38 • Permanent Link

Resideo Technologies, Inc. (NYSE: REZI) recently announced a definitive agreement with Honeywell International Inc. (NASDAQ: HON) to accelerate and eliminate all future monetary obligations under the indemnification and reimbursement agreement, resulting in a one-time cash payment of $1.59 billion to Honeywell in the third quarter of 2025. This agreement will terminate the indemnification agreement, eliminating Resideo's obligation to make annual payments to Honeywell of up to $140 million through year-end 2043.

The termination of the indemnification agreement is expected to be immediately accretive to Resideo’s adjusted earnings per share and free cash flow. Resideo's President and CEO, Jay Geldmacher, stated that this agreement with Honeywell marks a significant turning point for Resideo, enhancing its strategic and financial flexibility and providing simplicity and clarity for investors.

Resideo expects to finance the payment to Honeywell through a combination of approximately $400 million of cash-on-hand and new senior secured debt financing committed by J.P. Morgan and Wells Fargo.

In addition to this significant agreement, Resideo separately announced its intention to separate its ADI Global Distribution business through a tax-free spin-off to Resideo shareholders, creating two independent public companies.

Regarding financial results, Resideo provided an outlook for its second quarter of 2025, expecting to be above the high-end of its outlook range for net revenue, non-GAAP adjusted EBITDA, and non-GAAP adjusted earnings per share. The company also expects to report total cash of approximately $750 million at June 28, 2025.

Resideo will release its second quarter 2025 financial results and update its annual outlook on August 5, 2025.

These recent developments indicate a significant transformation for Resideo, positioning the company for enhanced profitability, financial flexibility, and value-creating opportunities. The company's strategic decisions and financial performance will be closely watched as it moves forward with these changes. The market has reacted to these announcements by moving the company's shares 17.84% to a price of $28.93. If you want to know more, read the company's complete 8-K report here.

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