Honeywell in Spin-Off of Resideo Technologies
October 29, 2018
Cleary Gottlieb represented Honeywell International Inc. (Honeywell) in the spin-off of Resideo Technologies Inc. (Resideo), Honeywell’s former Homes and ADI Global Distribution business.
Resideo’s registration statement on Form 10 was declared effective by the SEC on October 3, 2018. The spin-off was completed and Resideo began regular-way trading on the New York Stock Exchange on October 29, 2018.
Cleary also acted as counsel in Resideo’s bank and bond financings. Resideo’s senior secured credit facilities consist of a seven-year senior secured first-lien term B loan facility in an aggregate principal amount of $475 million, a five-year senior secured first-lien term A loan facility in an aggregate principal amount of $350 million, and a five-year senior secured first-lien revolving credit facility in an aggregate amount of $350 million in revolving commitments.
The bond financing consists of 6.125% senior notes due 2026 in the aggregate principal amount of $400 million. The borrower under the credit facilities and the issuer of the notes was a wholly owned subsidiary of Resideo, and guarantees are provided by Resideo and substantially all of its domestic subsidiaries. The notes were offered pursuant to exemptions from registration under Rule 144A and Regulation S and the offering closed into escrow on October 19, 2018. On October 25, 2018, the proceeds of the notes offering were released from escrow and the bank financing transactions closed concurrently.
In addition to entering into a separation and distribution agreement, Resideo and Honeywell entered into other separation agreements for the spin-off related to transition services, tax and employee matters, a patent cross-license agreement, and an agreement for Resideo to use the Honeywell Home brand under a long-term, exclusive license. Cleary also advised on securities law, corporate governance, executive compensation and benefits, intellectual property matters, compliance with global privacy laws, and commercial matters, all related to Resideo’s establishment as an independent company.
Honeywell is a Fortune 100 technology company that delivers industry specific solutions that include aerospace products and services, control technologies for buildings and industry, and performance materials globally.
Resideo is a leading global provider of critical solutions primarily in residential environments, with a presence in more than 150 million homes globally. Its ADI Global Distribution business is the leading wholesale distributor of security and low voltage products. Resideo has a growing portfolio of connected home solutions supported by software platforms for consumers and channel partners.