Shares of Snap One (SNPO) soared more than 30% in premarket trading Monday on the announcement that the company has been acquired by Resideo Technologies (NYSE:REZI) for roughly $821 million.
REZI stock rose 5%.
The deal values Snap One at $10.75 per share, representing a 32% premium over its closing price last Friday.
The total transaction value is estimated at around $1.4 billion, including debt. Hellman & Friedman, a private equity firm that holds about 72% of Snap One's shares, has endorsed the acquisition.
Resideo plans to finance the purchase through debt, cash reserves, and a $500 million perpetual convertible preferred equity investment from Clayton Dubilier & Rice. This investment grants Clayton Dubilier & Rice the right to appoint two members to Resideo's board.
The company anticipates that the acquisition will generate annual synergies of approximately $75 million once integrated.
Resideo expects to finalize the deal in the second half of the year.
"The acquisition of Snap One is an exciting step in Resideo's continued transformation through portfolio optimization, operational enhancements and structural cost savings actions," said Jay Geldmacher, Resideo's President and CEO.
"ADI and Snap One are highly complementary businesses and together will meaningfully enhance our strategic and operational capabilities as a significant player in attractive growth categories.