Vivint closes $762m refi

Deal includes nine new investors, most new to security
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Wednesday, March 7, 2012

PROVO, Utah—In a deal that includes 20 lenders, Vivint announced Feb. 29 that it has closed a new $762 million senior debt financing, $72 million more than the residential security and home automation provider’s previous financing.

“We now have 20 banks investing,” Christopher Black, Vivint CFO, told Security Systems News. “Nine of those banks are new and most are new to the security industry as well.”

The new lenders include private equity groups, hedge funds, small regional banks, much larger banks and CapitalSource, a security industry lender that had not previously invested in Vivint.

“It takes a fair amount of work for lenders who are new to the space to get comfortable with the intricacies of the model,” Black said. Yet, Vivint ended up “very much oversubscribed in the deal,” he said. “We had about $150 million of additional approval from lenders [above the $762 million].”

“It’s a great problem to have,” Black conceded, adding that the interest among lenders is a positive sign for the industry because new lenders may look for other investments in the space.

Vivint will use the additional financing for organic growth. “We’ll continue to grow the company, use it for new-account origination,” Black said.

“Summer model [door-to-door sales] is still the core for us but we’re seeing traction with our national advertising [launched this past summer] generating inbound calls from potential customers,” he said. The company’s solar offering is catching on, he added, and last year’s changes to Vivint’s model—adding home automation—“took our RMR average from $48 per month up to $57 in the last year.”

The new financing was led by Goldman Sachs Specialty Lending Group. Others that participated are Bank of America, Canadian Pension Plan, Barclays Capital, Davidson Kempner, Fortress, Zions, DE Shaw, Private Bank, Wells Fargo Foothill and Highbridge. New lenders in the deal are Citibank, Angelo Gordon, TPG, Capital Source, Monarch, Vector, One William Street, Perot and Elm Park.