Snap One Holdings Corp. ( SNPO ) shares are jumping premarket today after the company inked a definitive deal to be acquired by Resideo Technologies, Inc. ( REZI ) for around $1.4 billion, including net debt.

The per-share price of $10.75 represents a 32% premium to Snap One’s closing shares price on April 12, 2024.

The transaction represents a 7.4x multiple on Snap One’s adjusted EBITDA for the twelve months ending December 29, 2023, further adjusted by including projected annual run-rate synergies of $75 million.

The transaction is anticipated to close in the second half of 2024, subject to customary closing conditions. 

Post closure, Snap One ( SNPO ) will be integrated into Resideo’s ADI Global Distribution business.

The transaction is expected to be accretive to Resideo’s non-GAAP EPS in the first full year of ownership, with favorable revenue growth and margin profile to ADI and Resideo ( REZI ).

Resideo ( REZI ) expects to fund the transaction through proceeds from committed debt financing, cash on hand, and a $500 million perpetual convertible preferred equity investment from Clayton, Dubilier & Rice (CD&R).

At December 31, 2023, Resideo ( REZI ) had cash and cash equivalents of $636 million and total outstanding debt of $1.41 billion.

Jay Geldmacher, Resideo’s President and Chief Executive Officer, said, “ADI and Snap One ( SNPO ) are highly complementary businesses and together will meaningfully enhance our strategic and operational capabilities as a significant player in attractive growth categories.”

John Heyman, Chief Executive Officer of Snap One ( SNPO ), said, “This is the right next step to capture new opportunities to bring our solutions to market. The future of smart living is here. Demand for connected technology products continues to grow, and Resideo ( REZI ) is the right owner to drive our expansion.”

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Price Action: SNPO shares are up 30.8% at $10.65 premarket on the last check Monday.