NRG Energy to Buy Vivint Smart Home in $5.8 Billion Deal

NRG Energy Inc. on Tuesday said it agreed to buy Vivint Smart Home Inc., for $2.8 billion in cash the assumption of $2.4 billion of the company’s debt for a total deal value of $5.2 billion. NRG, which produces and sells energy services, said it would pay $12 a share for Vivint, a 33% premium to Vivint’s closing share price on Monday. NRG is effectively betting on the smart device market by buying $VVNT which offers integrated home systems that include security, lighting and other services. VVNT’s competitors include Amazon’s Ring, Ecolab and Google’s Nest.

Vivint Smart App

The acquisition, expected to close in the first quarter of 2023, will accelerate NRG’s consumer-focused growth strategy, the company said. NRG said it expects fund the deal through excess free-cash flow in 2023, pay down acquisition-related debt and maintain its dividend-growth policy.

Market Reaction

  • VVNT 11.86, +2.87, +31.9%
  • NRG 37.29 -3.55 -8.69%

“Last year at our investor day, we presented our strategic road map to becoming the leading provider of essential services for homes and businesses, informed by consumer trends and underpinned by disciplined execution,” NRG Chief Executive Mauricio Gutierrez said.

Shares of NRG fell almost 4% to $39.26 in premarket trading.

Vivint’s products include Vivint smart hub, Vivint smart home app, Vivint doorbell camera pro, and Vivint outdoor camera pro.

From The TradersCommunity News Desk