Resideo Plans to Split ADI Global Distribution from Its Operations
Resideo and ADI Global Distribution to Split in Upcoming Separation
Resideo Technologies, a leading building products manufacturer, has announced plans to spin off its ADI Global Distribution business as an independent public company through a tax-free separation expected to be completed in the second half of 2026.
The move aims to create two specialized, independent public companies, each focused on its core markets and business model. Jay Geldmacher, Resideo's president and CEO, will retire once the separation is complete, but will serve in an advisory capacity for six months thereafter. Rob Aarnes, current president of ADI, will continue leading ADI following the separation.
Resideo will continue operating its Products & Solutions (P&S) business, with Tom Surran, the current president of P&S, at the helm. The company's focus remains on solutions that maximize comfort, ensure safety, and deliver cost savings. With an expansive network of over 100,000 professional installers, Resideo conducts over 15 million installations per year.
ADI, a global wholesale distributor of low-voltage products, will become an independent public company after the separation. Its portfolio includes over 500,000 professionally installed products and serves both commercial and residential markets across key specialty categories. ADI's business, with lower adjusted EBITDA margins compared to Resideo’s P&S segment, is expected to benefit from focused management and investor attention.
The strategic goal of this separation is to unlock shareholder value and improve operational performance for both companies. By pursuing distinct growth strategies and investment profiles, they hope to enhance their operational performance and strategic flexibility. The spin-off follows Resideo’s acceleration of a $1.59 billion payment to Honeywell, which terminates indemnification obligations and improves its financial structure ahead of the separation.
Corporate governance details for Resideo and ADI will be disclosed in the coming months. All appointments are subject to board approval. The separation is expected to be tax-free for U.S. federal income tax purposes.
In summary, the separation of Resideo and ADI is a strategic move designed to unlock value and enhance operational performance for both companies. It will allow each entity to focus on its core markets and business model, setting them up for continued growth and success in their respective industries.
- Resideo's Product & Solutions (P&S) business will continue to prioritize solutions that optimize comfort, ensure safety, and provide cost savings, while leveraging an extensive network of over 100,000 professional installers for more than 15 million installations annually.
- Post-separation, ADI, as an independent public company, will manage a portfolio of over 500,000 professionally installed products, catering to both commercial and residential markets across key specialty categories, with its business model expected to benefit from focused management and investor attention due to its lower adjusted EBITDA margins compared to Resideo’s P&S segment.
