Resideo to Spin Off ADI Distribution Business, Creating 2 Independent Public Companies

The Scottsdale, Ariz.-based company stated the move is designed to enhance strategic flexibility, unlock value and improve operational performance for both businesses. Resideo anticipates completing the spin-off in the second half of 2026, pending customary conditions and regulatory approvals.

Resideo President and CEO Jay Geldmacher stated the separation builds on operational progress that has made each segment capable of standing independently. “We believe a separation is the next, most natural step, allowing ADI and P&S the opportunity to unlock their full potential and better serve all our stakeholders,” Geldmacher said.

Following the separation, Tom Surran will continue to lead Resideo’s P&S business, while Rob Aarnes will remain president of ADI. Geldmacher’s previously announced retirement will become effective upon completion of the transaction, after which he will serve in an advisory role for six months.

Business focus post-separation

Resideo’s P&S segment will continue to focus on residential controls and sensing solutions under brands such as Honeywell Home, First Alert, Braukmann and BRK, according to the announcement. The company claims a network of 100,000 professional installers and more than 15 million installations per year. For the 12-month period ending March 29, P&S reported $2.6 billion in net revenue and a segment adjusted EBITDA margin of 24.2%.

ADI will maintain its position as a global distributor of low-voltage products, serving both residential and commercial markets. Its portfolio includes more than 500,000 products across categories such as security, audio-visual, access control and smart home automation. ADI’s offerings also include proprietary technologies and exclusive brands such as Control4, OvrC, Araknis Networks and WattBox. For the same 12-month period, ADI reported $4.5 billion in net revenue with a segment adjusted EBITDA margin of 7.5%.

Agreement with Honeywell

Resideo also announced a definitive agreement with Honeywell to accelerate and eliminate all future monetary obligations under an existing indemnification and reimbursement agreement that was established when Resideo was spun off from Honeywell in 2018. Under the terms, Resideo will make a one-time payment of $1.59 billion in the third quarter of 2025. A scheduled payment of $35 million was made on July 29.

Upon closing of the transaction, the agreement will terminate, removing the company’s obligation to make annual payments of up to $140 million through 2043, according to the announcement.

Resideo financial outlook

Resideo expects its second quarter 2025 financial results to exceed the high end of its previously announced guidance. The company had projected net revenue between $1.81 billion and $1.86 billion, adjusted EBITDA between $175 million and $195 million, and adjusted earnings per share between $0.51 and $0.61. Resideo also said it expects to report approximately $750 million in total cash as of June 28.

The company plans to release its full second quarter financial results and updated annual outlook on August 5.

Resideo’s advisors include Evercore for financial matters, Willkie Farr & Gallagher LLP as legal counsel, and Collected Strategies for strategic communications.