NRG Energy Inc., which operates power plants and runs a retail electricity businesses, agreed to buy Vivint Smart Home Inc. for $2.8 billion in an all-cash deal, accelerating its strategy to focus more on consumers and home services.
(Bloomberg) — NRG Energy Inc., which operates power plants and runs a retail electricity businesses, agreed to buy Vivint Smart Home Inc. for $2.8 billion in an all-cash deal, accelerating its strategy to focus more on consumers and home services.
The deal at $12 a share represents a premium of about 33% to Vivint’s closing share price on Dec. 5, according to a statement Tuesday. The total enterprise value of the deal is $5.2 billion, including $2.4 billion of debt. Vivint, based in Provo, Utah, sells smart thermostats, locks, lights and other household devices.
NRG Energy has been pushing into the retail electricity business, with the latest deal a further step away from running power plants. The Houston-based company, which still operates a fleet of gas, coal and other generating plants totaling 18 gigawatts, agreed to buy Centrica Plc’s Direct Energy unit in a $3.6 billion deal in 2020.
“Last year at our investor day, we presented our strategic roadmap to becoming the leading provider of essential services for homes and businesses, informed by consumer trends and underpinned by disciplined execution,” said Mauricio Gutierrez, president and chief executive officer of NRG. “The acquisition of Vivint is a transformational step in achieving our vision.”
NRG shares fell as much as 8.8% before the start of regular trading in New York. Vivint surged 32%.
The deal will create a company with an network of about 7.4 million customers across North America, and is in line with NRG Energy’s long-term free cash flow before growth per share growth target, it said. The transaction is expected to close in the first quarter of 2023, and is subject to customary closing conditions.
(Updates with background, comment starting in the third paragraph)
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