Shares of Snap One (SNPO) rose more than 30% in premarket trading Monday following the announcement that the company had been acquired by Resideo Technologies (NYSE:) for approximately $821 million.
REZI shares rose 5%.
The deal values Snap One at $10.75 per share, up 32% from last Friday’s closing price.
The total transaction value is estimated at approximately $1.4 billion, including debt. Hellman & Friedman, a private equity firm that owns about 72% of Snap One, approved the acquisition.
Resideo plans to finance the acquisition with debt, cash reserves and a $500 million perpetual convertible preferred investment from Clayton Dubilier & Rice. This investment gives Clayton Dubilier & Rice the right to appoint two members to Resideo’s board of directors.
Once integrated, the company expects the acquisition to generate annual synergies of approximately $75 million.
Resideo expects to complete the transaction in the second half of the year.
“The acquisition of Snap One is an exciting step in Resideo’s ongoing transformation through portfolio optimization, operational improvements and structural cost savings efforts,” said Jay Geldmacher, President and CEO of Resideo.
“ADI and Snap One are complementary businesses and together they will significantly enhance our strategic and operational capabilities as a significant player in attractive growth categories.