The No. 1 CE Pro 100 integration firm Vivint could be up for sale or announcing an initial public offering (IPO) in the near future. The Wall Street Journal is reporting Blackstone Group is pursuing one option or the other, which could result in a $3 billion windfall for the asset management firm which purchased Vivint for more than $2 billion in 2012.
Blackstone is reportedly in talks with investment banks about conducting a dual-track sale process for Vivint. An IPO or a sale could potentially give Vivint an equity valuation of $3 billion and an enterprise valuation of $6 billion.
The news comes on the heels of Sprint announcing that it will roll out Vivint smart home products across 16 stores and, eventually, 80 stores by the end of the year (read more in CE Pro's sister publication Security Sales & Integration).
The dual-track process is a common option for private equity firms looking to exit an investment, as it allows the firm added leverage in striking a deal when both a sale and an IPO are on the table. The preference is typically a full sale, as the IPO market has recently spiked in volatility, the Journal reports.
Two years after acquiring Vivint, Blackstone took its sister company, Vivint Solar, public.
Last year, the maker of solar panels terminated a planned merger with SunEdison after SunEdison’s board began investigating claims from both a former and a current employee challenging the accuracy of SunEdison’s financial disclosures.
The residential security market has been a lucrative niche for private equity firms as of late. Apollo Global Management last year acquired ADT Corp. in a nearly $7 billion deal, and is already preparing an IPO that could value the company at well over $15 billion including debt, the WSJ has reported.
AT&T is also looking to unload some smart-home technology. The company’s security unit, AT&T Digital Life, has 400,000 to 500,000 customers and could be worth $1 billion in a sale, Reuters recently reported.