We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Resideo (REZI) First Alert Buyout to Aid Home Safety Portfolio
Read MoreHide Full Article
Resideo Technologies, Inc. (REZI - Free Report) agreed to acquire Aurora, IL-based First Alert, Inc. in a $593-million cash transaction. The seller in the buyout deal is Newell Brands Inc. (NWL - Free Report) . The acquisition will boost Resideo’s offerings in the home security solutions market.
Shares of Resideo gained 1.55% yesterday, ending the trading session at $24.18.
First Alert is a leading manufacturer and supplier of home safety products in multiple markets. Its offerings are fire extinguishers, smoke alarms, combination alarms, carbon monoxide (CO) alarms, and others. Its prime brands in the market are BRK, Onelink, and First Alert.
Its revenues totaled $395 million in 2021, while its adjusted earnings before interest, tax, depreciation and amortization (“EBITDA”) were $55 million.
Inside the Headlines
Resideo noted that the First Alert buyout would be a strategic fit and complement its prevalent sensor solutions offering. Also, First Alert’s distribution channel, experienced workforce, and healthy e-commerce and retail businesses will be advantageous. Its manufacturing capabilities will also get a boost from First Alert’s Mexico-based manufacturing facility and Texas-based distribution facility.
The First Alert buyout is anticipated to generate annual cost synergies of $30 million by 2023-end. Also, the net present value of tax benefits is expected to total $46 million. The acquisition price of $593 million mirrors 6.4X adjusted EBITDA of 2021. The purchase price, net of tax benefits, is $547 million.
Subject to the fulfillment of customary conditions and the receipt of regulatory approvals, Resideo anticipates the First Alert acquisition to be complete in first-quarter 2022.
In 2021, Resideo acquired Foxboro, MA-based Shoreview Distribution and Richmond, VA-based Norfolk Wire & Electronics.
Zacks Rank, Price Performance and Earnings Estimates
With a market capitalization of $3.4 billion, Resideo currently carries a Zacks Rank #3 (Hold). Solid product offerings, synergies from buyouts, and strengthening demand are beneficial for the company. Supply-chain restrictions and cost inflation might be concerning.
In the past three months, Resideo's shares have lost 10.5% compared with the industry's decline of 14.1%.
Image Source: Zacks Investment Research
In the past 60 days, the Zacks Consensus Estimate for the company's earnings per share is pegged at 37 cents for fourth-quarter 2021 and $1.55 for 2021. Also, the consensus estimate for 2022 earnings is unchanged at $1.87.
The company is slated to report fourth-quarter 2021 results on Feb 15, 2022, after market close. Per its preliminary expectations, the company’s revenues were $1.454 billion and the gross margin was 27.2%. Its operating profit is expected to be $141 million.
Stocks to Consider
Two better-ranked stocks in the industry are discussed below.
The company reported better-than-expected results in two of the last four quarters and lagged estimates twice. The earnings surprise was -1.34%, on average. In the past 60 days, the Zacks Consensus Estimate for Lakeland’s fourth-quarter fiscal 2022 (ended January 2022) earnings has been revised down 14%.
In the last four quarters, the company recorded better-than-expected results in two of the last four quarters and lagged estimates twice. It pulled off a trailing four-quarter earnings surprise of -14.76%, on average. The Zacks Consensus Estimate for Verra’s fourth-quarter earnings has been unchanged in the past 60 days.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Resideo (REZI) First Alert Buyout to Aid Home Safety Portfolio
Resideo Technologies, Inc. (REZI - Free Report) agreed to acquire Aurora, IL-based First Alert, Inc. in a $593-million cash transaction. The seller in the buyout deal is Newell Brands Inc. (NWL - Free Report) . The acquisition will boost Resideo’s offerings in the home security solutions market.
Shares of Resideo gained 1.55% yesterday, ending the trading session at $24.18.
First Alert is a leading manufacturer and supplier of home safety products in multiple markets. Its offerings are fire extinguishers, smoke alarms, combination alarms, carbon monoxide (CO) alarms, and others. Its prime brands in the market are BRK, Onelink, and First Alert.
Its revenues totaled $395 million in 2021, while its adjusted earnings before interest, tax, depreciation and amortization (“EBITDA”) were $55 million.
Inside the Headlines
Resideo noted that the First Alert buyout would be a strategic fit and complement its prevalent sensor solutions offering. Also, First Alert’s distribution channel, experienced workforce, and healthy e-commerce and retail businesses will be advantageous. Its manufacturing capabilities will also get a boost from First Alert’s Mexico-based manufacturing facility and Texas-based distribution facility.
The First Alert buyout is anticipated to generate annual cost synergies of $30 million by 2023-end. Also, the net present value of tax benefits is expected to total $46 million. The acquisition price of $593 million mirrors 6.4X adjusted EBITDA of 2021. The purchase price, net of tax benefits, is $547 million.
Subject to the fulfillment of customary conditions and the receipt of regulatory approvals, Resideo anticipates the First Alert acquisition to be complete in first-quarter 2022.
In 2021, Resideo acquired Foxboro, MA-based Shoreview Distribution and Richmond, VA-based Norfolk Wire & Electronics.
Zacks Rank, Price Performance and Earnings Estimates
With a market capitalization of $3.4 billion, Resideo currently carries a Zacks Rank #3 (Hold). Solid product offerings, synergies from buyouts, and strengthening demand are beneficial for the company. Supply-chain restrictions and cost inflation might be concerning.
In the past three months, Resideo's shares have lost 10.5% compared with the industry's decline of 14.1%.
In the past 60 days, the Zacks Consensus Estimate for the company's earnings per share is pegged at 37 cents for fourth-quarter 2021 and $1.55 for 2021. Also, the consensus estimate for 2022 earnings is unchanged at $1.87.
Resideo Technologies, Inc. Price and Consensus
Resideo Technologies, Inc. price-consensus-chart | Resideo Technologies, Inc. Quote
The company is slated to report fourth-quarter 2021 results on Feb 15, 2022, after market close. Per its preliminary expectations, the company’s revenues were $1.454 billion and the gross margin was 27.2%. Its operating profit is expected to be $141 million.
Stocks to Consider
Two better-ranked stocks in the industry are discussed below.
Lakeland Industries, Inc. (LAKE - Free Report) presently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The company reported better-than-expected results in two of the last four quarters and lagged estimates twice. The earnings surprise was -1.34%, on average. In the past 60 days, the Zacks Consensus Estimate for Lakeland’s fourth-quarter fiscal 2022 (ended January 2022) earnings has been revised down 14%.
Verra Mobility Corporation (VRRM - Free Report) presently carries a Zacks Rank #2.
In the last four quarters, the company recorded better-than-expected results in two of the last four quarters and lagged estimates twice. It pulled off a trailing four-quarter earnings surprise of -14.76%, on average. The Zacks Consensus Estimate for Verra’s fourth-quarter earnings has been unchanged in the past 60 days.