Exclusive: SolarCity competitor Vivint Solar files for IPO: sources

NEW YORK Tue Aug 5, 2014 11:22am EDT

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NEW YORK (Reuters) - Vivint Inc, the home security and solar-energy provider owned by private equity firm Blackstone Group LP (BX.N), has confidentially filed for an initial public offering (IPO) of its solar business, according to people familiar with the matter.

Vivint may launch the IPO of Vivint Solar Inc as soon as this fall depending on market conditions, the people said on Tuesday, asking not to be named because the matter is not public.

Vivint is working with a group of banks including Goldman Sachs Group (GS.N) on the planned offering, some of the people said.

The company has taken advantage of the Jumpstart Our Business Startups (JOBS) Act, which allows companies with less than $1 billion annual revenue to file confidentially for an IPO with the Securities and Exchange Commission, the people added.

The potential offering is aimed at tapping strong investor demand for companies that install solar panels and help consumers finance them, and would follow Vivint Solar's rapid growth since its launch just three years ago.

Large industry competitor SolarCity Corp (SCTY.O), which went public in December 2012 at $8 per share, has since seen its shares soar and currently trade at around $70 per share, giving it a market capitalization of nearly $6.5 billion.

The sources said is was too early to predict Vivint Solar's valuation.

Vivint Solar launched in 2011 with just three sales people in New Jersey and now employs more than 2,200 people in seven states, thanks in large part to its parent company's resources.

It has grown to become the nation's second-biggest installer of residential solar panels. SolarCity, backed by Tesla Motors Inc (TSLA.O) founder Elon Musk, is the largest.

Representatives for Blackstone, Vivint Solar and Goldman Sachs declined to comment.

The U.S. solar market has grown dramatically in recent years thanks to generous state and federal incentives and declining prices of solar panels.

Both SolarCity and Vivint have benefited from a business model that allows homeowners to avoid the hefty upfront cost of buying a solar system outright.

Vivint puts the panels up on a house using funds provided by financial institutions and makes money by selling the power they produce to the homeowner for less than existing retail power rates.

Blackstone bought Vivint Solar's parent company, Vivint Inc, in 2012 for more than $2 billion. Formerly known as AFX Alarm Systems, the Provo, Utah company started selling alarm systems door-to-door in 1999.

(Additional reporting by Greg Roumeliotis in New York)

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