Honeywell announced that its board of directors has declared a pro rata dividend of Resideo Technologies Inc. common stock, to be made effective at 12:01 a.m. EDT on October 29, 2018, to Honeywell’s shareowners of record as of 5:00 p.m. EDT on October 16, 2018, the record date.
Each Honeywell shareowner of record will receive a distribution of one share of Resideo common stock for every six shares of common stock, par value $1.00 per share, of Honeywell that it holds on the record date. The distribution is subject to certain conditions.
“Today’s announcement marks the final phase of the portfolio transformation we announced in October of last year,” said Honeywell Chairman and Chief Executive Officer Darius Adamczyk. “The Garrett spin was completed on October 1, and Resideo is expected to be an independent, publicly traded company by the end of this month, which is earlier than anticipated. Once this final phase is complete, Honeywell will be more focused, with businesses that offer multiple platforms for growth and margin expansion, an even stronger balance sheet for aggressively deploying capital, and a continued focus on delivering outstanding returns for our shareowners.”
Adamczyk added, “Resideo is well-positioned for future growth and success as a standalone company, with decades of experience in the home comfort and security industries, best-in-class technologies, a long-term agreement to use Honeywell’s world-renowned brand, and an experienced management team focused on innovation and speed to market.”
It is anticipated that when-issued trading on the New York Stock Exchange in Resideo common stock will begin on or about Monday, October 15. On Monday, October 29, Resideo common stock will begin regular-way trading on the NYSE under the symbol, “REZI.”
Honeywell subsequently announced that, in connection with the spin-off of Resideo from Honeywell, Resideo Funding Inc., a wholly owned subsidiary of Resideo, has priced a private offering of $400 million aggregate principal amount of senior notes due 2026. The notes will be issued at par, bear interest at a rate of 6.125% per annum and mature on November 1, 2026. The Notes offering is expected to close on or about October 19, 2018.
In connection with the spin-off, Resideo intends to use the proceeds from the offering of the notes, together with borrowings under new senior secured credit facilities, to repay intercompany indebtedness to Honeywell or a subsidiary of Honeywell and to pay fees, costs and expenses related to the new senior secured credit facilities and the notes offering.
The notes will be senior unsecured obligations of the issuer and, from and after the escrow release date, will be guaranteed on an unsecured senior basis by Resideo and each of Resideo’s existing and future domestic subsidiaries that guarantee the new senior secured credit facilities.