NRG Energy Inc. to acquire Vivint Smart Home Inc.

HOUSTON & PROVO, Utah – NRG Energy Inc. has entered into an agreement to acquire Vivint Smart Home Inc. for $12 per share, or $2.8 billion in cash.  

NRG says the acquisition positions them as the leading essential home services provider and accelerates their growth plan. “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,” said Mauricio Gutierrez, president and CEO of NRG. “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.”

The transaction comes with an implied multiple of 6.3x run-rate Enterprise Value to Adjusted EBITDA. The annual run-rate Adjusted EBITDA, inclusive of $100 million of run-rate synergies, is $835 million NRG said. Agreement on the terms of the acquisition was unanimously approved by the boards of directors for both companies.

With nearly two million customers Vivint is a popular, public smart home company that’s nevertheless faced several legal challenges over the years relating to patent infringement and deceptive marketing. In early January 2023 Security Systems News reported on the start of CPI Security’s lawsuit against Vivint for “false and deceptive practices”. During Alarm.com’s Q3 earnings call this year the company discussed the monetary impact from Vivint discontinuing royalty fees and stated they’d filed for arbitration and had budgeted as much as $20 million dollars for legal fees. Alarm.com estimated as much as $6 million per quarter being lost because of Vivint.

“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,” said David Bywater, CEO of Vivint Smart Home. “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.”

The acquisition transaction is expected to close in the first quarter of 2023. Following completion of the transaction NRG stated that they intend to maintain a significant presence in Utah. For the full announcement you can visit www.nrg.com.