Vivint Valuation Falls $1.5 Billion

Published Dec 19, 2019 16:52 PM

Residential market struggles continue. Now, Vivint's valuation has fallen $1.5 billion in its impending merger.

Inside this note, we examine what happened, what is wrong and how this fits into broader troubles for the residential market.

Valuation ****

***********, ****** ********** ****** **** ** ** ****** at * $*.* ******* *********:

**** ** ****** ******* ********** ***** of $*.* *******, ****** ** *********** to **** ******** ** $*.* ******* for ****** **** ***** *** ******** EBITDA ** $*** *******, ******** ** Adjusted ****** ******** ** ************* **.**.

***, **** *** **** ******* ** just $*.* ******* ** * ************* lower ********,**********:

*** ********* ******* *** ******* ********** value ** ****** ** ************* $*.* billion, ******** ** ********* **** ******** EBITDA ******** ** ************* *.***

**** ** * **.*% **** ** valuation ** * ******.

Debt ***

********, **** ********* ***** ** *** debt *************:

*** ***** *** ******** ******* **** 5.2x ** *.** *** */**/**** ******** Adjusted ******, **** ************* *** *** proceeds ******** ** ** **** ** repay ****, ******** ** *********** ** Mosaic’s ****** ************.

**** ********* *** ****** * ******** as **** **** ****** ******* ******* fear ***** *********** ** **** *****. Originally, ** *********, *** **** *** to ****** ******** ** *.** *** now ** **** ** **** ******* to ***** *.

*******, *** ********* ******* ***** ** move ******** ** ******* ******, ****** reflecting ******* ****** ******** ***** **** levels.

Residential *****

***** ** ********* ********** ***** *** the *********** ******. *** *******, ********* banker**** **** ****** *** '*** ******** models', ****** *** '*** ** *******', companies **** ***, ****** **** ******** and ******. *** ******* *** ********** becoming **** ********* ** ******** ** lend, **** ********* *******'* **** ****** ****** ** the *********** ******'.

Vivint **** ***

****** *** ******** **** *** **** aggressive ***** ******* ******* **** * new ********** ** '***** ****' ********* but ** *** *****. ***** ***** customer ************ **** *** *******, ** still ***** **** **** $*,*** ** acquire * ******** *** ***** ***** rates **** **** ******** ******** ***** the ********* ** **** **** **.*% to **.*%, ******** ** **** **********.

** *** **** ******, ****** *** driven *** ******* ** **** ** door ***** *** *** *** ******** is *** ******* **** ***** *** its ********* **** '*****' ****' *** outpace *** ******* ********* ** *********** tech *********.

Comments (10)
UM
Undisclosed Manufacturer #1
Dec 19, 2019

I received an offer from OOMA for low cost alarm monitoring, similar to Ring.

I have an offer from Linksys to test a new “motion detection alarm” using the access points. (yeah, kinda strange) What if Alexa used AI to monitor for strange sounds and allowed you to arm/disarm through voice recognition? She’s already an eavesdropper!

I don’t think the “Custom Home” guys have to worry about valuations, but I don’t think there’s much loyalty in average residential and so much DYI with professional monitoring self service at a discount.

UM
Undisclosed Manufacturer #2
Dec 19, 2019

Amazon alexa already has this. You say alexa in leaving and it goes ugh guard mode to alert you to unusual sound.

(1)
UE
Undisclosed End User #3
Dec 19, 2019

They should concentrate on their WISP and Solar disciplines for future sustainability

(1)
UI
Undisclosed Integrator #4
Dec 20, 2019

I spoke to one of my friends at Vivint, he's been there for many years and has a very large team under him. He tells me it's time to get out of Vivint. It doesn't sound good for the company. He says without this deal Vivint is SOL.

(2)
UI
Undisclosed Integrator #5
Dec 26, 2019

What goes up must come down.

Vivint was built like a lot of the resi companies-- all valuation based on RMR multiple to get cheap debt to finance further growth. When the cheap debt evaporates and attrition catches up the model implodes.

Vivint and ADT are less security companies and more so consumer debt plays. The dead giveaway for this should have been when vivint went to citizens bank to start holding the paper rather than themselves.

(2)
(1)
U
Undisclosed #6
Dec 27, 2019

what role does the ESA play in all this?

for years they have preached RMR with seemingly-religious ferocity every ESX.

JH
John Honovich
Jan 17, 2020
IPVM

Vivint has announced the merger is now complete. The stock starts trading on the NYSE next Tuesday, will be interesting to see if it materially increases or decreases in valuation than.

(1)
JH
John Honovich
Jan 23, 2020
IPVM

Update: Vivint has now started trading and it's up ~15% this week:

Google lists the market capitalization at just "354.66M", I assume that's a mistake. Anyone have any insights into that?

JM
J. M.
Jan 30, 2020

Hi! Does anyone have any clue on Vivint's share price increase of ~50% on yesterday session? Will appreciate any information on it. Many thanks!

JH
John Honovich
Jan 30, 2020
IPVM

Thanks for sharing! I had not noticed that, below is their stock chart:

One thing I don't understand is that despite these big gains, Google is showing the market cap at less than $3 billion. Google could be wrong here but when VVNT when public the deal was announced at $4 billion. Anyone have any ideas on that discrepancy?