What Happened:Shares of smart living technology company Snap One (NASDAQ:SNPO) jumped 32.1% in the morning session after reports Resideo agreed to acquire the company for $10.75 per share in cash. When the deal is completed, Snap One will integrate into Resideo's ADI Global Distribution business. Resideo is a company historically known for its temperature control (heating, thermostats, air conditioning) and security solutions (sensors, video cameras) for both commercial and residential customers while Snap One is known for its connected home products. Together, the companies will boast a stronger position in security, audio visual, and smart living technology and be more attractive to the professional integrators that sell and install these products for end customers. At the price of $10.75 per share, the transaction is valued at approximately $1.4 billion, including net debt of Snap One. This represents a 7.4x multiple on SNPO's Adjusted EBITDA for the twelve months ended December 29, 2023 (further adjusted by including Resideo's projected annual run-rate synergies of $75 million).
Is now the time to buy Snap One? Find out by reading the original article on StockStory.
What is the market telling us:Snap One's shares are quite volatile and over the last year have had 30 moves greater than 5%. But moves this big are very rare even for Snap One and that is indicating to us that this news had a significant impact on the market's perception of the business.
Snap One is up 17% since the beginning of the year, and at $10.64 per share it is trading close to its 52-week high of $11.65 from June 2023. Investors who bought $1,000 worth of Snap One's shares at the IPO in July 2021 would now be looking at an investment worth $642.78.
