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Vivint active on legal turf

Vivint’s Few says lawsuits filed because company is looking out for its customers
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10/03/2012

PROVO, Utah—Several new lawsuits involving Vivint are pending in federal court in Utah, two of them initiated by the company and one in which it’s a defendant.

Alarm.com: ‘Reduce Your Use’ will help increase RMR

Company says new partnership with utility will save customers money and drive demand for ‘smart’ thermostats and security systems
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09/26/2012

VIENNA, Va.—Alarm.com has found a new way to tap into consumers’ growing interest in saving energy: It is partnering with a California utility in a program that gives Alarm.com customers extra savings on their utility bills if they cut energy usage during peak demand times.

Kessler on the multiple paid for Vivint

 - 
Wednesday, September 19, 2012

Whenever a big company in the industry sells, there’s interest in the specific metrics of the deal.

I called Jeff Kessler at Imperial Capital to talk about the pending sale of Vivint to the largest private equity group in the country, Blackstone and the numbers.

It’s not every day there’s a $2 billion deal in the security industry.

While Kessler has high praise for Vivint, he says that certain metrics are not as off-the-charts as one might think, at least according to his calculations.

Kessler pointed out that the sale of Vivint for north of $2 billion includes not only Vivint’s home security/automation business, but 2GIG (a manufacturer of alarm/home automations systems) and Vivint Solar.

So while the total enterprise value for the is “north of $2 billion”, the enterprise value for Vivint home security/automation is less than $2 billion, he said.

Which doesn’t mean the valuation is not impressive, it just means “the multiple of RMR, EBITDA or steady state cash flow will be less than the total amount given for the entire company,” he said.

In terms of a multiple of RMR, Vivint has said it has $30 million in RMR. Kessler said RMR will be higher by the time the sale closes at the end of the year. “If you assume that RMR will be higher, and you assume that [Blackstone will pay] something less than $2 billion for Vivint [home automation/security], the multiple of RMR paid would be in the 50s.”

However, Kessler doesn’t like to talk about multiples of RMR. He prefers to look at multiples of steady state cash flow, because that “really gets rid of the accounting variance that really riddles EBITDA,” he said.

Based on his estimates of Vivint’s [home automation/security’s] steady state cash flow, he said the multiple to be paid is actually “at lower end of the 10 to 13 times [steady state cash flow] range paid for larger, quality companies over the past 18 to 24 months.”

Kessler based his assumption on certain transactions such as Bain & Hellman buying Securitas Direct; Ascent Capital buying Monitronics, Summit buying Central Security Group and Oak Hill Capital buying Security Networks.

(I'm quite certain I'll hear from others who's assumptions and math differ from Kessler's. Please leave a comment on this blog or contact me.)

The important thing is that if you're trying to figure out a mulitple of RMR, steady state cash flow or EBITDA, you need to back Vivint Solar and 2GIG out of the equation.

And if you're trying to figure out if your company's ripe for a sale, take a good look at what Vivint's doing, Kessler said. 

Kessler called Vivint is a “model company” that’s taking advantage of new technology and providing  “a value-added proposition at a premium.” The company’s average RMR per new subscriber is the highest at over $50, and they’re doing good things such as moving away from all summer-sales and increasing in-house sales resources.”

The Blackstone deal “should allow Vivint a lot of growth [with the] forward-looking ideas it has on its platter. … This will allow capital runway for projects like increasing the size of their non-summer sales force, increasing their ability to move into new markets such as small and medium sized commercial security, and to fund the growth and development of new products in home and business services, some of which are not even on paper yet.”

There will be lots more deals done in the security industry in the next year. The capital players are interested, but Kessler said it’s the security companies, like Vivint, what he calls the “haves,” those that are taking advantage of new technology and which have a finely tuned sales and marketing efforts that will be the most sought after.

Putting the Vivint sale in perspective

Michael Barnes and George De Marco on the $2 billion valuation of Vivint, whether its growth plans are realistic, and its plans for expansion into commercial security
 - 
09/19/2012

YARMOUTH, Maine—News today that the Blackstone Group, a $180 billion private equity firm, will acquire home automation and security company Vivint in an agreement worth more than $2 billion is another “huge shot of support for the industry,” Michael Barnes, founding partner of Barnes Associates, a consulting and advisory firm that specializes in the security alarm industry, told Security Systems News.

Vivint to be sold to Blackstone in $2 billion deal

CEO Pedersen: Vivint has plans to become one of the largest national players in commercial security
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09/18/2012

PROVO, Utah—Vivint has entered into an agreement with the Blackstone Group to be acquired in a deal worth “north of $2 billion,” Todd Pedersen, Vivint CEO, told Security Systems News.

Vivint blows (hurricane) competition away, website says

 - 
Monday, September 10, 2012

We’re now in hurricane season, which began in the Atlantic Ocean in June and won’t end until the last day of November. And, according to a website that does annual reviews of home security companies, the company that stands out during such bad weather is Vivint.

6Webs.com selected Utah-based home automation/home security company as the “Best Home Security Company during Hurricane Season,” according to a news release from that website, http://www.6webs.com.

The company says it does independent reviews of home security systems and “conducts an annual review of the leading home security providers and ranks them based on several categories that are important to consumers.”

In awarding the recognition to Vivint – which is reportedly considering a sale – 6Webs.com cites the features the company offers including its Go! Control panel weather alerts, with inclement weather notifications via an iPhone, iPad or Android device; the back-up batteries it provides for all the home security systems it installs, which help ensure protection if the power goes out; its 24-hour customer service; and the fact that it provides cellular monitoring.

“In the case of a natural disaster not only could power be lost, but phone line service could be interrupted for a long period of time leaving your home less secure. This is also the case with Internet-based systems when power is lost, the connection to the monitoring center will be lost as well. Vivint’s cellular security system is the most reliable way to ensure the connections with the monitoring center is not interrupted,” the news release said.

Vivint exploring sale

CEO said $2 billion offer from Blackstone previously turned down
 - 
09/06/2012

PROVO, Utah—Vivint is considering a sale with final bids due later this month, according to a Reuters report. The report said the home automation/home security company could be valued at as much as $2 billion, and that among three private equity groups looking at the company is GTCR—owner of Protection 1, one of the nation’s largest security companies.

Vivint sued over alleged ‘robocalls’

Lawsuit contends prerecorded calls were to individuals’ cellphones without permission
 - 
09/05/2012

CHICAGO—A new class-action lawsuit accuses Vivint of sending automated calls to cellphones without the owners’ permission, violating their privacy and federal law.

Vivint takes door-knocking rival to court

Vivint contends a competitor used deception to steal Vivint customers
 - 
08/08/2012

PROVO, Utah—Vivint is suing another door-knocking company, alleging it has been using false and misleading statements to “slam” or take over Vivint customers.

Vivint adds $50 million to financing; surpasses RMR milestone

 - 
08/06/2012

PROVO, Utah—Summer-model company Vivint announced in June of that it had surpassed a $30 million milestone in RMR, putting it among the top three largest security companies in the nation. Also, the residential security and home automation provider said it had added another $50 million to its financing, bringing its total senior debt financing to $812 million.

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