Vivint Sells Off Solar Biz to SunEdison for $2.2B
Having already sold its door-to-door security and home automation business for $1.8 billion, Vivint is selling its solar installation business to renewable energy company SunEdison for $2.2 billion.
The door-to-door sales organization Vivint was acquired in 2012 by Blackstone capital for $2 billion (or about $1.8 billion net after divesting its 2Gig security and home automation manufacturing business to Nortek in 2013).
And now the company will collect another $2.2 billion through the sale of Vivint Solar (NYSE: VSLR) to SunEdison (NYSE: SUNE), the giant renewable-energy provider. SunEdison will, in turn, sell Vivint Solar’s rooftop photovoltaic (PV) portfolio, comprising 523 megawatts by year-end, to SunEdison yieldco TerraForm Power for $922 million. (What is a yieldco?)
“We are building the next generation of the biggest energy companies on earth,” said Julie Blunden, SunEdison’s chief strategy officer, speaking to GreenTech Media (GTM) before the company’s investor call this morning.
But SunEdison has struggled to grow a residential sales force organically.
SunEdison is a leader in large-scale project development, but has struggled to find its place in the residential PV sector. It sold home solar with the help of installation partners, but didn’t have a strong team for originating projects-until now.
Vivint Solar gives SunEdison the best door-to-door solar sales team in the country and one of the largest residential pipelines, behind SolarCity and Sunrun.
“Vivint Solar’s competitive advantage lies entirely in its sales capabilities, making up for SunEdison’s biggest weakness,” said Nicole Litvak, a senior solar analyst with GTM Research. “We’ve already seen other acquisitions of sales and lead generation companies in the residential space, such as SolarCity’s acquisition of Paramount Solar, and this will not be the last.”
Therein lies the continued value of Vivint, which has so far fetched $4 billion for its deft sales organizations.
To see how Vivint got there, you have to go back to 1992 when founder and CEO Todd Pedersen hired 10 buddies to sell pest control door-to-door, proving you could “sell high-quality products using a personal approach,” according to his online profile. By the end of the year, his team had expanded to 80 people.
In 1999, he took his door-to-door sales approach to the security industry, founding APX Alarm, which later became Vivint.
Today, Vivint sells more than 200,000 security and home automation systems door-to-door throughout the U.S. The sales training and incentive model is like no other.
Having proved its sales model in the security market, Vivint moved on to solar power, using largely the same door-to-door approach used to peddle security.
Vivint Solar was launched in 2011. Four years later it was sold for $2.2 billion. In between, the company went public on the NYSE in 2014, with modest performance over the subsequent nine months. Not surprisingly, the stock is way up today. Fool.com has some good analysis on the financials.
Next Vivint Frontier: Wireless Broadband
Now Vivint could be well on its way to fetching another $2 billion, this time with super-high-speed wireless broadband services sold … you guessed it, door-to-door (Vivint also has inside sales teams that sell all of its various services).
In 2013, Vivint rolled out a wireless Internet service that delivers up to 100 Mbps for $60 per month.
Breaking the Vivint broadband news back then, SSI‘s sister publication CE Pro explained:
Just as with security, home automation and now solar, Vivint is selling broadband door-to-door.
To make the economics work, Vivint needs to win about 25 percent of a neighborhood, according to Luke Langford, Vivint director of strategy and COO of Vivint Wireless.
The good news is that selling the service is pretty darn simple. Unlike security, automation and solar, high-speed Internet is universally understood and everyone wants it faster and cheaper.
“We don’t need sales superstars,” says Langford.
And once one household goes, so goes the neighborhood.
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