Vivint Solar Goes Public

Update: Vivint Solar went public on October 1, raising $330 million. Its stock debuted at $16 – at the lower end of the range analysts predicted. 

Blackstone Group and other co-investors made about $1.3 billion unrealized gains and own 78% of shares, down from 98% when they injected $195 million into the company.

by Rona Fried

After watching SolarCity‘s (Nasdaq: SCTY) stock soar 368% since its IPO, other solar leasing firms are salivating on the prospects of joining in.

Although it doesn’t capture the news the way SCTY does, Vivint Solar has quickly become the second biggest US solar installer, and announced its upcoming IPO.

Parent company Vivint, Inc. is spining off Vivint Solar, offering 20.6 million shares for $16-$18 each, with a goal of raising about 380 million – and a $1.79 billion market cap. It will be on the NY Stock Exchange, under the ticker VSLR.

Vivint Solar Logo

Last year, Vivint actually out-raised SolarCity in solar leasing funds with $780 million compared to $665 million. Started in 2011, solar is a new business for Vivint, which is the largest home automation services company in North America. It’s been able to grow so quickly by selling solar to an existing base of 675,000 customers. Blackstone Group bought them in 2012 for a cool $2 billion.  

According to Vivint’s SEC filing, the company has installed 130 megawatts of solar at about 22,000 homes in seven states, and  raised nine investment funds. Growth is picking up speed, with installations in the first half of 2014 almost equal to the entire previous year (58 MW), and up from just 14 MW in 2012.  

Vivent posted a profit this year, with revenues of $10 million for the first six months, compared to a loss of $20 million last year. It will use the IPO proceeds to grow the business and to repay its $78 million debt.

In just two years, Vivint Solar has grabbed 9% of the market, but it will be hard to catch up to SolarCity’s 29% share, especially with its plans for a solar gigafactory.

And while SolarCity operates across much of the US, Vivint is in just seven states – California, Hawaii, Massachusetts, NY, NJ, Maryland and now, Arizona. Surprisingly, Vivint goes door-to-door to get sales, which requires a large sales force and may be one reason why it’s so concentrated geographically.

Besides SolarCity and Vivint, the top US solar installers are SunRun, SunPower (Nasdaq: SPWR) and Sun Edison (NYSE: SUNE).  Will SunRun be next?

SunRun, which raised $150 million in May to finance solar systems, says it will double installations this year and next. Last year, they installed 792 megawatts of solar PV, 60% more than in 2012. All told, 60,000 customers have SunRun solar systems.

Here’s Vivint Solar’s website:

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