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PROVO — Utah tech giant Vivint Smart Home is now publicly trading on the New York Stock Exchange after a merger with special purpose acquisition company Mosaic.
The private smart home company completed its merger with the publicly-listed Mosaic Friday, officially converting Vivint into a publicly traded company called Vivint Smart Home Inc.
Vivint began trading Tuesday under the ticker VVNT. The stock price started at $11.05, dipped to a low of $10.40, and rose to a high of $12.51. It was trading at about $10.40 as of Tuesday evening.
The transaction is one of the largest special purpose acquisition company (SPAC) mergers in United States’ history, meaning Mosaic went public and raised funds for the express purpose of acquiring a company like Vivint. Though Vivint initially estimated the merger would generate nearly $700 million in new capital and an enterprise value of $5.6 billion, it’s generated a total of $488 million with an enterprise value of $4.2 billion.
Vivint Smart Home merger will generate nearly $700M to pay company debt
Utah tech giant Vivint Smart Home will boast an enterprise value of $5.6 billion following a merger announced Monday.“(It) is still a massive amount,” said Vivint CEO and founder Todd Pedersen. “You know, we were being a bit more aggressive, and we ended up with $488 million of proceeds. It’s still (one of) the largest SPAC transaction(s) that’s ever happened in the U.S., so we’re kind of proud of that.”
In September, Vivint said the vast majority of the proceeds from the transaction would go to paying down the company’s debt. The merger will give Vivint more cash flow to invest in the business since it won’t be paying interest on the debt, according to Vivint’s chief financial officer Mark Davies.
According to company filings, Vivint had about $450 million in debt coming due in 2020.
“We were intending on not doing anything until the end of this year. We could have just refinanced that debt with high-yield bonds, so it just so happens that we end up with about the amount of money in high-yield bonds due at the end of ‘20,” Pedersen said, noting that the debt wasn’t the only reason for turning the company into a publicly traded one.
Liquidity for investors and employees was an important factor, as well as gaining public equity to buy companies instead of using cash, Pedersen said. The priority, though, was helping the company grow faster, he added.
The merger won’t change much when it comes to company operations, though. Executive leadership and company headquarters location will stay the same.
“But when you’re a public company, you now have lots of, let's call them ‘partners’ or ‘shareholders.’ You’ve got additional scrutiny from regulators, and there’s analysts. But that, for me, is a positive because it sharpens your decisions. It sharpens your execution,” Pedersen said.
“I hate disappointing people or missing on projections, and I think we’ve got a company with that kind of a culture,” he said, “and this adds to the motivation to make sure we’re doing what we’re supposed to do for the consumer, for our shareholders, for the public market. We’re competitive and we want to perform.”
