Resideo Technologies, Inc. (NYSE: REZI) has announced the completion of a transaction with Honeywell International Inc. (NASDAQ: HON) to accelerate and eliminate all future monetary obligations under the indemnification and reimbursement agreement. This agreement was entered into in 2018 in connection with Resideo's spin-off from Honeywell.
As part of the transaction, Resideo made a one-time cash payment to Honeywell of $1.59 billion, resulting in the termination of the indemnification agreement. This includes the elimination of Resideo's obligation to make annual payments to Honeywell of up to $140 million through year-end 2043, as well as the elimination of all the affirmative and negative covenants contained in the indemnification agreement.
This significant payment and termination of future obligations are key financial metrics that indicate a substantial change in Resideo's financial position. The company has effectively accelerated its payment to Honeywell, freeing itself from sizable future financial commitments.
The completion of this transaction signifies a significant development in Resideo's financial strategy, as it eliminates a substantial long-term financial obligation. This could potentially impact the company's cash flow and financial outlook in the years to come. Today the company's shares have moved 4.96% to a price of $32.83. For more information, read the company's full 8-K submission here.
