Home security and home automation company Vivint is reported to have confidentially filed for an initial public offering (IPO) for its solar business, Vivint Solar.
Reuters is reporting that “people familiar with the matter” who “asked not to be named” have informed them that Vivint may launch the IPO of its fledgling solar business as early as this fall, depending on the conditions of the market.
However, given competitor SolarCity’s recent success, the decision seems like it could be a no brainer.
When reached for comment, Vivint Solar declined to shed any light on the matter.
GTM Research claim that Vivint Solar is only second to SolarCity in US residential solar installation over the last few quarters — though the distance between the two is extreme.
According to Reuters, Vivint is working with a group of banks, including Goldman Sachs Group, on the proposed offering. Vivint, acquired by Blackstone for more than $2 billion in September of 2012, is said to be taking advantage of the Jumpstart Our Business Startups Act which aims to encourage funding for small business opportunities by easing SEC regulations.
Vivint Solar installs the solar panels for residential installations using funds provided by financial institutions, and makes money on the return generation of power at a cheaper rate than the homeowners were previously paying under the traditional three-step method.
SolarCity runs the same way, and as CEO Lyndon Rive recently said on Fox Business, the cost is $0 — the installing company sells you the resulting energy your own solar panels are generating. The company, which itself went public in December of 2012 at $8 per share, has since seen its shares grow substantially to $70 per share, and is now valued at nearly $6.5 billion.
So are these unnamed sources correct? If the market for residential solar remains even vaguely on its current trend, then yes, those sources are correct and the move by Vivint was really just a matter of time.
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