Blackstone to Buy Vivint for $2B and Support Its Expansion in Solar and Beyond

Ucilia Wang, Contributing Editor
September 19, 2012 | 4 Comments

Home automation giant Vivint hasn't worked the solar market for long, but it already found a big investor who promises to expand the Utah company's reach into renewable energy and beyond. Blackstone announced Wednesday it will buy Vivint for over $2 billion.

When the deal closes, which should come before the end of the year, it will give Blackstone control over 50 percent of the company, reported the New York Times. The rest of the company is owned by the management, according to Reuters.

Vivint built its reputation as one of the country’s largest residential security service provider in the country. It then added the sales of equipment and services for homeowners to automate and control their thermostats, lighting and small appliances remotely. The company entered the solar business last year and in October announced a $75 million fund from U.S. Bankcorp to finance residential solar installations and sell leases to homeowners. Instead of paying for the equipment and labor of installing a solar energy system upfront, Vivint’s customers pay a monthly fee over 20 years. This financing model has become popular not only because it removes the high upfront cost, but it also is supposed to lead to lower monthly utility bills.

Founded in 1999 as Apax Alarm Security Solutions, the company changed its name to Vivint last year to reflect its ambition to move beyond the home security market, Vivint’s co-founder and CEO, Todd Pedersen, told me last year. The company’s name is a mesh of “Vive,” or “to live,” and “intelligent.”

Pedersen said back then that Vivint became a big home automation company because it figured out how to market and install equipment efficiently. He believed the same strategy will work just as well in the solar business. He was so confident that he predicted Vivint would become the largest residential solar company in the U.S. this year.

Having Blackstone as an investor should help Pedersen realize his vision. Blackstone apparently outbid two other private equity groups to win the deal to buy the majority stake in Vivint. Vivint is counting on a significant financial support from Blackstone that will enable the company to develop “innovative new technologies, products and services designed to expand the company’s influence beyond the home environment into the automobile, the workplace, areas of recreation and other core spheres of human activity.” This may indicate that Vivint is eyeing other energy management services, including perhaps electric car charging, which could be centralized and remotely controlled by Vivint and its customers.

Blackstone’s interest in Vivint reflects this investor sentiment that the retail service segment of the solar market is so much more attractive than the manufacturing sector, which has seen many factory closures and bankruptcies. The market has experienced an oversupply of solar panels since the start of 2011, and that has benefited installers and their investors as well as consumers. Prices for solar panel systems owned by investors rather than consumers have dropped in California, for example, though that decline doesn’t necessarily mean homeowners also are paying lower monthly fees on their leases.

4 Comments

ANONYMOUS
September 23, 2012

Hal Helsley . . . . You acknowledge that heavy ion 'fusion cannot be done small & be economical', and call a MW-GW size small. Now a GW (billion watt, or million kilowatt) is not normally considered small for o power generation unit, and corresponds roughly to the average use of a million households. . . . . It hardly fits into the present context. . . . . Your rosy picture of heavy ion fusion (a variant of inertial confinement fusion) is belied by the reality, which is more accurately stated in http://en.wikipedia.org/wiki/Inertial_confinement_fusion , which much more accurately states (with references to back up its key claims) of ALL inertial confinement fusion projects:- . . . . 'Inertially confined fusion and the nuclear weapons program The very hot and dense conditions encountered during an Inertial Confinement Fusion experiment are similar to those created in a thermonuclear weapon, and have applications to the nuclear weapons program. ICF experiments might be used, for example, to help determine how warhead performance will degrade as it ages, or as part of a program of designing new weapons. Retaining knowledge and corporate expertise in the nuclear weapons program is another motivation for pursuing ICF. Funding for the NIF in the United States is sourced from the 'Nuclear Weapons Stockpile Stewardship' program, and the goals of the program are oriented accordingly. It has been argued that some aspects of ICF research may violate the Comprehensive Test Ban Treaty or the Nuclear Non-Proliferation Treaty. In the long term, despite the formidable technical hurdles, ICF research might potentially lead to the creation of a 'pure fusion weapon'.'

Harold Helsley
September 22, 2012

The energy source for the future ...
RF Accelerator Driven Heavy Ion Fusion Power
There is a solution to the energy need for the world and the US without generating green house gases or nuclear fission radioactive problems.
It is Heavy Ion Fusion (HIF) as developed in the late 1970's at Argonne National Lab under the Department of Defense (DOD).
You never heard of it, ... right, few people have, ... as HIF was set aside by the US DOD (& DOE) in favor of lasers, as lasers could maybe be a weapon and HIF could not be a weapon.
Fusion was first suggested as a potential power source in the late 1920's. The first earth-bound fusion reaction was demonstrated in 1952. Then shown potentially doable in a small size in 1978-9 at Argonne National Lab and Hughes Lab. Since then it has been endorsed for 35 years by the scientific community "as the conservative way to go" to develop fusion as an energy generation source … but never funded, as it was and is still BIG (expensive, prolific and "benign"). In 1980, the world did not need a BIG new carbon fee source of energy, as it does now. Fusion was put on the shelf or attached to research projects to see if it could be done in small (MW-GW) size. Fusion cannot be done small and be economical. Data suggests that fusion can produce 5-7 cents kWh electricity, $3.20 per/gal fuel, and $0.002 per gallon for potable water, all needed today and at a very reasonable unit price.
In 2009, Fusion Power Corporation with Dr. Robert J. Burke and Dr. Charles E. Helsley, secured a patent using heavy ions as the energy source to fuse the Hydrogen isotopes Deuterium and Tritium producing Helium and heat. It solves the problems that Germany, Russia, America and Japan were having in focusing enough energy on the pellet (target) to cause fusion to occur.
In December 2010, the process was presented at the 18th HIF International Symposium in Darmstadt, Germany, along with an economic model, by FPC.

Visit www.fusionpowercorporation.com

Anatoly Arov
September 21, 2012

They are very lucky, I am developing a new energy producing device which is 100 times more efficient than solar technology and can not get even $250K support to finish R&D from anywhere.

Julie Rosenthal
September 20, 2012

A though inspiring article - thank you!

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Ucilia Wang

Ucilia Wang is a California-based freelance journalist who writes about renewable energy. She previously was the associate editor at Greentech Media and a staff writer covering the semiconductor industry at Red Herring. In addition to Renewable...