Blackstone has contacted investment banks about conducting a dual-track sale process for Vivint, a maker of smart-home technology, according to The Wall Street Journal; this could reportedly lead to either an IPO or a sale that might give the company an equity valuation of $3 billion and an enterprise valuation of $6 billion. Blackstone has backed the business for nearly five years, completing its purchase of Vivint for more than $2 billion in November 2012.
Last year, Vivint raised another $100 million in growth financing in a round co-led by Solamere Capital and Peter Thiel. Summit Partners is among Vivint's other existing backers. The company offers an integrated smart-home platform that includes cameras, sensors and smart locks in addition to in-home installation services.
The IoT space has been a hotbed of private equity activity in recent years, with global deal count increasing by more than 150% between 2012 and 2015, per the PitchBook Platform. So far this year, investors have completed 46 new deals in the space, on pace to top last year's total of 64 and nearly on track to match 2015's decade-high of 69. On a quarterly basis, meanwhile, activity has stayed mostly steady dating back to the start of 2014.
PE firms have also shown a recent willingness to shell out billions on deals related to home security—and they don't seem to be regretting it. Last year, for instance, Apollo Global Management acquired ADT for $6.9 billion, or about $15 billion including the company's debt; already, reports emerged in July that Apollo was considering a public offering that could value the business at $15 billion.
If ADT or Vivint hits the public markets before the end of December, they'll join a minor renaissance for PE-backed IPOs in the US during 2017. After just 27 businesses took the plunge during 2016, the fewest since 2009, private equity firms have already taken 30 of their portfolio companies public in 2017 according to PitchBook data.
Check out our previous IoT coverage.
Article by Kevin Dowd, PitchBook