Monitor when-issued trading of ADIG starting ~3 trading days before the distribution date (around July 29, 2026) for price discovery. The spin-off creates a pure-play distribution company with high leverage (pro forma debt/EBITDA ~3.1x based on FY2025 Adjusted EBITDA of $318M) and a concentrated preferred holder with conversion rights. Watch for early selling pressure from REZI holders who may not want ADI exposure. The $16.152 conversion price on the preferred stock provides a reference point for valuation.
Price Chart
Executive Summary
Resideo Technologies (REZI) is spinning off its ADI Global Distribution business into a standalone publicly traded company, ADI Global Distribution Inc. (ADIG), via a pro rata distribution of 100% of ADI common stock to Resideo stockholders at a ratio of 1 ADIG share for every 2 REZI shares held. The distribution is expected on August 3, 2026, and ADI will list on the NYSE under the ticker 'ADIG'. ADI will incur approximately $1.0 billion in new debt, pay a $900 million cash dividend to Resideo, and issue preferred stock to the CD&R Group, which will hold ~19.69% voting power on an as-converted basis. The spin-off creates a pure-play specialty distributor with $4.8 billion in FY2025 revenue but also introduces significant leverage and a concentrated ownership structure.
Key Facts
- Distribution ratio: 1 share of ADIG for every 2 shares of REZI held on July 20, 2026 record date.
- Distribution expected at 5:00 p.m. ET on August 3, 2026; ADI to list on NYSE under symbol 'ADIG'.
- ADI will incur ~$1.0 billion in new debt (term loan + notes) and a $500 million undrawn revolving credit facility.
- ADI will pay a $900 million cash dividend to Resideo from the debt proceeds as partial consideration for the asset contribution.
- CD&R Group will beneficially own ~19.69% of ADI's total voting power (common + preferred on as-converted basis) and can designate up to two directors.
- ADI preferred stock: 150,000 shares, 7.00% cumulative dividend, initial conversion price $16.152, convertible at holder's option.
- FY2025 revenue $4.8 billion, net loss $261 million, Adjusted EBITDA $318 million; Q1 2026 revenue $1.2 billion, net loss $1 million, Adjusted EBITDA $56 million.
- Pro forma FY2025 net income available to common stockholders: $40 million ($0.53 EPS); Q1 2026 pro forma net loss available to common: $6 million (-$0.08 EPS).
- Approximately 75.75 million shares of ADI common stock will be distributed to Resideo stockholders.
Financial Impact
ADI will incur ~$1.0 billion in new debt and pay a $900 million cash dividend to Resideo, resulting in pro forma long-term debt of $976 million and cash of $150 million as of April 4, 2026. Pro forma FY2025 net income available to common stockholders is $40 million; Q1 2026 pro forma net loss available to common is $6 million.
Risk Factors
- High pro forma leverage (~$1B debt) increases interest expense and financial risk; covenants include net leverage ratio step-downs from 4.75x to 3.50x.
- CD&R Group's ~19.69% voting power and board representation could lead to conflicts of interest with common stockholders.
- Preferred stock dividends (7.00% payable cash or PIK) and potential conversion dilute common equity and reduce cash available for operations.
- Integration of Snap One acquisition and execution of standalone public company infrastructure may incur higher-than-expected costs.
- Macroeconomic headwinds (tariffs, interest rates, housing market softness) could pressure revenue and margins.
Market Snapshot
Documents Analyzed
This report is based on 2 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 8-K Filing (Primary) | 0001213900-26-084882 |
| Document: ea030019001ex2-1.htm | 0001213900-26-084882 |
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Oct 13, 2026 13d ago | 144 | $16.51 | awaiting T+20 | — | $16.36 (−0.91%) |
Oct 8, 2026 18d ago | SC 13G | $17.20 | awaiting T+20 | — | $16.36 (−4.88%) |
Sep 11, 2026 6w ago | 144 | $20.35 $16.95 | ▲ +16.71% | ▲ +18.97% | $16.36 (+19.61%) |
Aug 21, 2026 9w ago | 144 | $22.10 $21.02 | ▲ +4.89% | ▲ +6.20% | $16.36 (+25.97%) |
Aug 20, 2026 9w ago | 144 | $21.12 $20.92 | ▲ +0.95% | ▲ +0.42% | $16.36 (+22.54%) |
Aug 13, 2026 10w ago | 8-K | $25.82 $20.53 | ▼ −20.49% | ▼ −18.74% | $16.36 (−36.64%) |
Aug 4, 2026 11w ago | 8-K | $22.00 $20.34 | ▼ −7.55% | ▼ −6.31% | $16.36 (−25.64%) |
Jul 14, 2026 14w ago | 8-K | — | awaiting T+20 | — | — |
Jul 7, 2026 15w ago | 3 | — | awaiting T+20 | — | — |
Jul 7, 2026 15w ago | 3 | — | awaiting T+20 | — | — |
US Market Status
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