Vivint Solar targets IPO of $371 million

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U.S. solar installer and leasing specialist Vivint Solar announced last week that it is targeting an initial public offering (IPO) to the value of $371 million.

Bought by the Blackstone Group in 2012 for €2 billion, Vivint Inc. has confirmed that it is ready to spin off its Utah-based solar business, with Reuters reporting that the company expects its IPO to be priced at between $16 and $18 per share. If accurate, the company’s top-end valuation would be approximately $1.9 billion.

Vivint Solar currently boasts 9% market share of the U.S. solar leasing market. This is some way behind market leader SolarCity’s 29% share, but Vivint’s bosses are confident that they can eat into SolarCity’s lead with this newest round of funding. All 20.6 million company shares are up for sale in the IPO, with Blackstone cutting its stake in the company from 97% to 75.3% following the offering.

Earlier this year it was reported that Vivint Solar had tapped a range of leading investors to serve as book-runners for the IPO. These included Goldman Sachs, Credit Suisse Securities (USA) LLC, and BofA Merrill Lynch. Once launched on the New York Stock Exchange, Vivint Solar’s shares will be listed under the symbol VSLR.

With a long-term debt portfolio of $78.3 million, Vivint Solar has said that is hopes to use proceeds raised from the IPO to repay that debt. Generally, the company is financially stable, having posted a profit of $12.5 million in the first half of the year, with revenues rising five-fold to $10.06 million over that period.

The market in which Vivint Solar is most active – the U.S. residential solar lease sector – is expected to grow by more than 37% CAGR by 2018, according to GTM Research. The analysts expect solar leases to account for 3.25 GW by that date.

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