NRG Energy to acquire Vivint for $2.8 billion

American energy company NRG Energy is planning to acquire home security company Vivint for $12 per share or $2.8 billion in an all-cash transaction. The agreement has been unanimously approved by the boards of directors of both companies.

NRG will acquire 100% of the outstanding equity of Vivint for a total transaction value of $5.2 billion, which consists of approximately $2.8 billion in cash and the assumption of $2.4 billion of debt (net of cash). This consideration represents a premium of approximately 33% to Vivint’s closing share price on December 5, 2022.

The combined company will be “the leading essential home solutions provider,” with a network of approximately 7.4 million customers across North America, presenting “a substantial” cross-sell opportunity.

Vivint operates in the space of ADT and by the end of Q3 2022, it had nearly two million customers. Net loss for the first nine months of 2022 was $71.9 million.

Last year, we reported that Vivint is looking to establish an MGA and develop specific homeowner coverages for customers.

“Last year at our Investor Day, we presented our strategic roadmap to becoming the leading provider of essential services for homes and businesses, informed by consumer trends and underpinned by disciplined execution. The acquisition of Vivint is a transformational step in achieving our vision. Customers want simple, connected, and customized experiences that provide peace of mind. Vivint’s smart home technology strengthens our retail platform, improves our customer experience, and increases customer lifetime value. I am excited to welcome Vivint to the NRG family.” – Mauricio Gutierrez, president and CEO of NRG.

“We are pleased to announce a transaction that delivers immediate and compelling cash value to Vivint’s stockholders while also presenting significant opportunities to drive our company’s continued success in the years to come. Our agreement with NRG is the culmination of our Board’s ongoing pursuit of maximizing value for Vivint stockholders and is a testament to the strength of the Vivint brand, capabilities, and proven industry leadership. We look forward to working with NRG to create exciting opportunities for Vivint as part of a larger platform. On behalf of our Board and management team, I thank the hard-working Vivint employees for the significant role they have played in this important milestone.” – David Bywater, CEO of Vivint Smart Home.

Bottom Line: Vivint competes with ADT, which is heavily backed by State Farm.