Security Watch: Vivint bought for more than $2 billion

Oct. 19, 2012
Alarm provider Vivint goes for $2 billion to Blackstone investment group, includes 2Gig and Vivint Solar

After rebranding with an emphasis on providing home technology services rather than just security nearly two years ago, Utah-based Vivint, formerly known as APX Alarm, was recently acquired by New-York based investment firm Blackstone from its shareholders for more than $2 billion. Additionally, Blackstone will also be acquiring Vivint Solar, the company’s solar panel installation business, as well as security and automation equipment maker 2GIG Technologies, from their respective shareholders.

According to Vivint co-founder and CEO Todd Pedersen, the acquisition by Blackstone will help expand their access to capital, which he said is critical for a company that is growing at their pace in as many different areas as they are.

"We do a lot of other things besides security and some of them are very capital intense," Pedersen said. "You install a solar system and its $20,000 a system. Now we’re only installing like 20 systems a day, but it’s a lot of capital and we intend to get to hundreds of installs a day at some point. Really, the Blackstone move is partnering with a group that is right there at the top of ability to access the capital markets and the credit markets in an efficient way to help scale the company. For me, this my first time running a $2 billion company, but we would like to go to $10 billion and I’ve never run that so having a partner that actually has managed companies that (are worth) $25 billion-plus we think that is a good strategic partnership."

With this injection of capital, Pedersen said that Vivint will be looking to improve and expand on its current technology and service offerings, while at the same time continuing to focus on what the company already does well. Pedersen added that the company will be entering the commercial space with a new panel that will serve as "hub" for a host of services including security. Vivint, which already covers most of North American with the exception of Quebec, also has plans to expand geographically into Australia in the coming months.

“The commercial push is also going to be new and we’re not really in the commercial space at all (currently) to speak of, but that’s going to be a big focus of ours,” he said. “If you can’t tell, we’ve got pretty big dreams, but we never bite off more than we can chew and so it’s going to be one thing at a time.”

While Vivint may have gotten its start purely as an alarm company years ago, Pedersen said that it would have never been valued at $2 billion had they never branched out into other technology sectors, such as home automation and solar energy.     

"Fifty-six percent of the customers we added to the platform this year, which will end up being about 190,000 new customers, will have added additional services to their home on top of security," Pedersen explained. "We have a phenomenal (market) penetration with additional services and it’s going up constantly. We intend to have a home audio solution late next summer that we are going to be able to add to the portfolio of services we’re selling to the home. We love security, without question, but we’re definitely not defining ourselves as a security company. Just like when we sell solar, we’re not defining ourselves as an energy company."

Pedersen said that this acquisition is proof in and of itself of the success of the company’s revamped strategy and rebranding efforts.

"We changed our name from APX Alarm because if you’re out there knocking on doors and you’re selling solar energy… it doesn’t resonate that well," he said. "It was the right name for what we had been, the wrong name for what we had become or transformed into."

The acquisition is expected to close before the end of the year.

“I think this (acquisition) is nothing but good for the industry in the security space because we are still in that space,” Pedersen said. “This is bringing attention and recognition to a space that was a little bit sleepy for a long-time that I think is starting to recognize, ‘hey we’re in the home, let’s do something a little bit more unique.’ It’s also been a real stable industry so hopefully, other people can draft off kind of where we’re going.” More info: