Resideo to Raise Capital With Public Offering of Common Stock
Proceeds from the sale of 17 million shares of Resideo common stock will be used to pay down debt and for funding growth investments.
Resideo intends to use the net proceeds of the offering to repay borrowings under its revolving credit facility and for general corporate purposes, including funding growth investments and potential acquisitions.
Morgan Stanley and Evercore ISI are acting as lead joint book-running managers on the transaction. BofA Securities and J.P. Morgan are acting as additional bookrunners on the transaction. The underwriters will have the option to purchase up to an aggregate of 2.55 million additional shares of common stock from Resideo.
The company’s stock fell 14% to close at $16.77 after the company reported the common stock offering on Monday.
On Nov. 5, Resideo reported better-than-expected third-quarter results. ADI revenue of $790 million increased 11%, which included an approximate 2.8 percentage point benefit from acquisitions. Demand returned across the business, particularly for products serving the residential market in North America and for large project business.
Products & Solutions Q3 revenue was $572 million, up 12% compared to last year due to improved end market demand, particularly in the security and comfort markets. Products & Solutions concluded the quarter with backlog well above typical levels, reflecting continued strong demand as well as COVID-19-related impacts on the company’s manufacturing operations and supply chain.
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