NRG Energy Bolsters Retail Platform Via $5.2B Vivint Smart Home Deal - What's On The Cards?

  • NRG Energy Inc NRG has agreed to acquire Vivint Smart Home Inc VVNT for $12 per share or $2.8 billion in an all-cash transaction.
  • The consideration represents a premium of approximately 33% to Vivint's closing share price on December 5, 2022.
  • Assuming the $2.4 billion of debt (net of cash), the total transaction value amount to $5.2 billion.
  • The deal has been unanimously approved by the boards of both companies and is expected to close in the first quarter of 2023.
  • The acquisition of the smart home platform company accelerates the realization of NRG's consumer-focused growth strategy and creates the leading essential home services platform.
  • RelatedVivint Smart Home Adds This New Feature - Check Out What's New
  • The transaction improves and diversifies NRG's financial profile while also expanding the total market opportunity available to NRG.
  • The annual run-rate Adjusted EBITDA, inclusive of $100 million of run-rate synergies, is $835 million.
  • In 2023, NRG expects to use its excess free cash flow to fund the Vivint acquisition, reduce acquisition-related debt, and maintain its common stock dividend growth policy.
  • NRG held $379 million in cash and equivalents as of September 30, 2022, and $2.4 billion was available under its credit facilities.
  • "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 CEO Mauricio Gutierrez. "The acquisition of Vivint is a transformational step in achieving our vision."
  • Price Action: VVNT shares are trading higher by 32.2% at $11.89, and NRG shares are trading lower by 16.6% at $34.05 on the last check Tuesday.
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