The boards of directors at both companies have unanimously approved the agreement.
Provo, Utah-based Vivint has nearly two million customers using its technology platform to integrate various home device functions. Houston-based NRG Energy, one of the largest utilities in the U.S., is involved in energy generation and retail electricity. Combined, the companies will service more than 7.4 million customers across North America, according to an announcement.
The acquisition is said to accelerate the realization of NRG’s consumer-focused growth strategy and creates a leading home automation services platform enabled by proprietary technologies and complementary sales channels.
“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,” NRG CEO and President Mauricio Gutierrez said in a statement. “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 improves and diversifies NRG’s financial profile while also expanding the total market opportunity available to NRG, according to the announcement. The annual run-rate adjusted EBITDA, inclusive of $100 million of run-rate synergies, is $835 million.
This consideration represents a premium of approximately 33% to Vivint's closing share price on Dec. 5, 2022.
Under the deal, which is expected to close in the first quarter of 2023 subject to closing conditions, NRG will acquire 100% of Vivint’s outstanding stock in a $5.2 billion transaction comprising $2.8 billion in cash and the assumption of $2.4 billion in debt.
Vivint was acquired by Blackstone for more than $2 billion in 2012. Vivint then became publicly listed through a reverse merger with Mosaic Acquisition, a special-purpose acquisition company of SoftBank Corp.
Goldman Sachs & Co. is serving as NRG’s exclusive financial advisor. Goldman Sachs Bank USA is providing fully committed financing. White & Case LLP is serving as legal counsel to NRG.
J.P. Morgan Securities is serving as Vivint’s exclusive financial advisor. Simpson Thacher & Bartlett LLP is serving as legal counsel to Vivint.