Blackstone to Buy Vivint for $2B and Support Its Expansion in Solar and Beyond

Written By empatlima on Rabu, 19 September 2012 | 10.43

When the deal closes, which should come before the end of the year, it will give Blackstone control over 50 percent of the company, reported the New York Times. The rest of the company is owned by the management, according to Reuters.

Vivint built its reputation as one of the country's largest residential security service provider in the country. It then added the sales of equipment and services for homeowners to automate and control their thermostats, lighting and small appliances remotely. The company entered the solar business last year and in October announced a $75 million fund from U.S. Bankcorp to finance residential solar installations and sell leases to homeowners. Instead of paying for the equipment and labor of installing a solar energy system upfront, Vivint's customers pay a monthly fee over 20 years. This financing model has become popular not only because it removes the high upfront cost, but it also is supposed to lead to lower monthly utility bills.

Founded in 1999 as Apax Alarm Security Solutions, the company changed its name to Vivint last year to reflect its ambition to move beyond the home security market, Vivint's co-founder and CEO, Todd Pedersen, told me last year. The company's name is a mesh of "Vive," or "to live," and "intelligent."

Pedersen said back then that Vivint became a big home automation company because it figured out how to market and install equipment efficiently. He believed the same strategy will work just as well in the solar business. He was so confident that he predicted Vivint would become the largest residential solar company in the U.S. this year.

Having Blackstone as an investor should help Pedersen realize his vision. Blackstone apparently outbid two other private equity groups to win the deal to buy the majority stake in Vivint. Vivint is counting on a significant financial support from Blackstone that will enable the company to develop "innovative new technologies, products and services designed to expand the company's influence beyond the home environment into the automobile, the workplace, areas of recreation and other core spheres of human activity." This may indicate that Vivint is eyeing other energy management services, including perhaps electric car charging, which could be centralized and remotely controlled by Vivint and its customers.

Blackstone's interest in Vivint reflects this investor sentiment that the retail service segment of the solar market is so much more attractive than the manufacturing sector, which has seen many factory closures and bankruptcies.  The market has experienced an oversupply of solar panels since the start of 2011, and that has benefited installers and their investors as well as consumers. Prices for solar panel systems owned by investors rather than consumers have dropped in California, for example, though that decline doesn't necessarily mean homeowners also are paying lower monthly fees on their leases. 

19 Sep, 2012


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Source: http://www.renewableenergyworld.com/rea/news/article/2012/09/blackstone-to-buy-vivint-and-support-its-expansion-in-solar-and-beyond?cmpid=rss
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