Resideo is set to undergo a major transformation over the next year by divesting its ADI Global Distribution unit which comprises the majority of the company’s business.

Scottsdale, AZ-based Resideo — a manufacturer and distributor of smart home and facility electrical and electronic products — announced July 30 that it plans to spin off ADI in a move that will create two separate public companies by the end of 2026: Resideo, which is the company’s current Products & Solutions (P&S) unit, and ADI.

Following the separation, P&S President Tom Surran and ADI President Rob Aarnes will continue leading both companies, respectively. Resideo previously announced the pending retirement of company President and CEO Jay Geldmacher back this past November, and his retirement will go into effect when the spin-off is complete, after which he will serve as an advisor for six months.

The divestment is subject to final approval from the Resideo board and regulatory approvals. It does not require shareholder approval.

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“At Resideo, we have instilled strong operational discipline across the enterprise, resulting in independence for each of ADI and P&S,” Geldmacher said in a news release. “Through continued growth and investment, ADI and P&S are leading players in their distinct areas – ADI as a global wholesale distributor of low-voltage products including security and audio-visual solutions, and P&S as a building products manufacturer focused on residential controls and sensing solutions. We believe a separation is the next, most natural step, allowing ADI and P&S the opportunity to unlock their full potential and better serve all our stakeholders.”

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Following the split, here’s what those two companies will look like:

Resideo — branded as a leading building products manufacturer focused on residential controls and sensing solutions. Its network of 100,000 pro installers provide over 15 million installations per year, with Resideo noting its position to grow the company’s existing portfolio of connected home solutions across air, safety, security, water and energy through top brands that include Honeywell Home, First Alert, Braukmann and BRK.

That P&S unit had 2024 revenue of $2.6 billion (38% of total) — down 4% annually — while 12-month revenue through March 29 of this year likewise was $2.6 billion with segmented adjusted EBITDA margin of 24.2%.

ADI — branded as a leading wholesale distributor of low-voltage products, including security and audio-visual solutions. Its portfolio includes over 500,000 installed products that cater to commercial and residential markets across key categories of security, fire, audio-visual, access control, smart living and data communications. ADI has an expanding suite of proprietary technologies and services under exclusive brands that include Control4, OvrC, Araknis Networks and WattBox.

The ADI unit had 2024 revenue of $4.2 billion (62% of total) that jumped 18% annually — largely driven by Resideo’s $1.4 billion acquisition of smart-living products maker Snap One in June of last year. Snap One had 2023 annual sales of just over $1 billion.

Resideo said that ADI had revenue of $4.5 billon and adjusted EBITDA margin of 7.5% for the 12 months ended March 29 of this year.

ADI was No. 6 on MDM’s 2025 Top Distributors List for Electrical/Data/Security.

Resideo said that more corporate details about the spin-off will be shared in the coming months.

Resideo Set to Complete Honeywell Payments in 3Q

Alongside the spinoff news, Resideo also announced July 30 that it reached a deal with former parent company Honeywell to accelerate and end all future payment obligations owed to the manufacturing conglomerate. Those payments are tied to Honeywell’s 2018 spinoff that made Resideo a standalone public company.

The deal involves Resideo making a one-time cash payment of $1.59 billion to Honeywell during 3Q25.

That payment will cover the remainder of Resideo’s obligations to Honeywell, which previously included an annual $140 million payment through year-end 2043.

“This agreement with Honeywell marks a significant turning point for Resideo and exemplifies the constructive relationship we have forged with Honeywell,” Geldmacher said. “With the closing of this agreement, we expect to significantly enhance our strategic and financial flexibility while also providing simplicity and clarity for our investors.”

Resideo is set to report its 2025 second quarter financial results on Aug. 5.