Resideo Technologies plans to separate its ADI Global Distribution unit into a standalone public company, creating two independent businesses in a move aimed at sharpening strategic focus and simplifying operations. The spin-off is expected to be completed in the second half of 2026 and will be structured as a tax-free transaction for shareholders.
Once the separation is finalized, Resideo will continue operating its products and solutions segment, which manufactures sensing and control technologies for residential and commercial applications. ADI, which distributes low-voltage security, fire, and audio-visual products, will become a separate company with its own management team and capital structure.
Jay Geldmacher, Resideo’s president and CEO, said the decision to split the company reflects its progress in streamlining operations and strengthening both business units. Geldmacher will retire once the transaction is complete, remaining on as an advisor for six months. Tom Surran, currently president of the products and solutions division, will lead Resideo post-separation. Rob Aarnes will continue as president of ADI.
Resideo said the two businesses have distinct operating models and end markets. In the 12-month period ending March 29, 2025, the products and solutions segment generated $2.6 billion in revenue with an adjusted EBITDA margin of 24.2 percent. ADI reported $4.5 billion in revenue and an adjusted EBITDA margin of 7.5 percent.
The company also announced that in the second quarter of 2025 financial results will come above its previously stated guidance. In May, Resideo forecast revenue between $1.805 billion and $1.855 billion, adjusted EBITDA between $175 million and $195 million, and adjusted earnings per share between $0.51 and $0.61. Results will be reported on August 5. As of June 28, Resideo expects to report $750 million in cash.
In a separate development, Resideo said it will pay $1.59 billion to Honeywell International in the third quarter to settle all remaining obligations under an indemnification agreement stemming from its 2018 spin-off from Honeywell. The agreement had required Resideo to make annual payments of up to $140 million through 2043. The company also made a regularly scheduled $35 million payment on July 29. Once the settlement is complete, the agreement will be terminated.
The spin-off does not require shareholder approval but is subject to regulatory clearances, financing conditions, and final board approval.
Don’t miss any content from Distribution Strategy Group. Join our list.
