SCHEDULE 13D/A: CD&R Entities Solidify 14.5% Stake in Resideo Technologies with Recent Common Stock Acquisition

CD&R Channel Holdings II, L.P. and its affiliated entities have increased their beneficial ownership in Resideo Technologies, Inc. to 14.5% through a recent acquisition of common stock.

Summary

• CD&R Channel Holdings II, L.P., CD&R Channel Holdings, L.P., CD&R Investment Associates XII, Ltd., and CD&R Associates XII, L.P. (collectively, the "Reporting Persons") have filed an Amendment No. 2 to their Schedule 13D.
• The Reporting Persons collectively beneficially own 24,272,331 shares of Resideo Technologies, Inc. Common Stock, representing 14.5% of the outstanding class.
• This ownership includes 18,517,830 shares of Common Stock issuable upon conversion of 498,500 shares of Series A Cumulative Convertible Participating Preferred Stock, based on an initial conversion price of $26.92.
• Additionally, 5,754,501 shares of Common Stock are directly held by CD&R Channel Holdings II, L.P.
• On May 9, 2025, CD&R Holdings II acquired 5,754,501 shares of Common Stock from UBS AG, London Branch, for a total price of $99,999,992.03, at a price per share of $17.3777.
• The acquisition was funded by cash on hand from capital contributions from partners and cash dividends received from the Preferred Stock.
• The beneficial ownership percentages are calculated based on 148,503,534 shares of Common Stock outstanding as of April 28, 2025, plus the shares issuable upon conversion of the Preferred Stock, totaling 167,021,364 shares.

Sentiment

Score: 7

Explanation: The sentiment is moderately positive. The filing indicates a significant and continued investment by a major private equity firm, suggesting confidence in the company. The acquisition of additional common stock reinforces this positive outlook, although the document is purely a disclosure of ownership and does not contain operational or financial performance data.

Positives

• The acquisition of additional common stock by CD&R Channel Holdings II, L.P. demonstrates continued investment and confidence from a major private equity firm in Resideo Technologies, Inc.
• The significant beneficial ownership stake of 14.5% by the CD&R entities indicates a strong, strategic interest in the company's future.

Future Outlook

The document does not provide explicit forward-looking statements or guidance regarding Resideo Technologies, Inc.'s future performance or strategic direction from the company itself. It primarily details changes in beneficial ownership by the Reporting Persons.

Management Comments

• CD&R Holdings II and CD&R Investment Associates expressly disclaim beneficial ownership of the 18,517,830 shares of Common Stock issuable upon conversion of Preferred Stock held by CD&R Holdings.
• CD&R Investment Associates expressly disclaims beneficial ownership of the 5,754,501 shares of Common Stock directly held by CD&R Holdings II.
• All members of the Investment Committee of limited partners of CD&R Associates expressly disclaim beneficial ownership of the reported securities.
• Donald J. Gogel and Nathan K. Sleeper, as directors of CD&R Investment Associates, expressly disclaim beneficial ownership of the reported securities.

Industry Context

This filing indicates a continued and significant investment by Clayton, Dubilier & Rice (CD&R), a prominent private equity firm, in Resideo Technologies, Inc. Such a substantial stake suggests CD&R's strategic interest in the home automation, security, and distribution sectors where Resideo operates. This type of institutional investment can signal confidence in the long-term prospects of the company and its industry, potentially leading to increased strategic influence or operational changes to enhance value.

Comparison to Industry Standards

• Large institutional investments, particularly by private equity firms like CD&R, are a common strategy to gain significant influence or control over publicly traded companies. This is consistent with typical private equity investment models that seek to drive value creation through strategic oversight and operational improvements.
• While the document does not provide specific comparable companies or projects, the acquisition of a 14.5% stake is a substantial position, often indicative of an activist or strategic investor aiming for board representation or significant input on corporate strategy, a common practice in the investment industry.

Management Changes

Stakeholder Impact

• Shareholders: The increased stake by CD&R could signal confidence and potentially lead to strategic initiatives that aim to enhance shareholder value. It also indicates a significant block holder with potential influence.
• Management: CD&R's substantial ownership may lead to increased engagement with Resideo's management, potentially influencing strategic decisions and corporate direction.
• Employees, Customers, Suppliers, Creditors: No direct immediate impact is detailed in this ownership disclosure, but any future strategic shifts driven by CD&R's influence could indirectly affect these stakeholders.

Key Dates

Keywords

Resideo Technologies, CD&R, Schedule 13D/A, Beneficial Ownership, Common Stock, Preferred Stock, SEC Filing, Institutional Investment, Equity Stake, Corporate Governance