Post-SunEdison Collapse, Vivint Solar Is Going Home Again

  • Rooftop solar company is pursuing smart-home strategy
  • CEO Bywater shifts goal after aborted SunEdison acquisition

Vivint Solar Inc. is getting back to its roots.

This time last year, the Blackstone Group LP-backed rooftop solar installer was trying to close its proposed acquisition by SunEdison Inc., then the world’s largest clean-energy company. Now, 11 months after that deal fell apart, it’s again partnering with sister company Vivint Smart Home.

Chief Executive Officer David Bywater is pursuing a plan to link rooftop solar power, home security and energy management systems. Vivint Solar and Vivint Smart Home announced a partnership last month at the Consumer Electronics Show in Las Vegas, and they expect to introduce a bundled package this year. The goal is similar to the long-term vision advanced by billionaire Elon Musk, whose Tesla Motors Inc. acquired rival SolarCity Corp. in November with a vision of creating green homes powered by renewable energy. Tesla changed its name this week to Tesla Inc. to indicate the company’s focus has expanded beyond cars.

“I have really wanted to return to what I thought was the original vision,” Bywater said Thursday in an interview in New York. “A home is not smart unless you have panels on your roof. I can put less solar on your roof if you have more control inside.”

Bywater envisions a home this way: panels on the roof, batteries inside to store power, sensors and a smart thermostat to manage consumption, and enabled for electric vehicles. “Everything but the car is in play,” he said.

This wasn’t the company’s plan in July 2015, when SunEdison announced a deal to acquire Vivint Solar for $2.2 billion -- a landmark acquisition that would cement the buyer as an energy “supermajor.” But SunEdison stumbled, forcing the deal to be renegotiated and then terminated, foreshadowing its April bankruptcy.

Vivint was battered by the failed transaction, which slowed growth and made it hard to attract investment. Between the deal’s initial announcement and collapse, its shares fell almost 74 percent. Vivint was unchanged at the close in New York.

“You need to be careful with who you date,” Bywater said.

New Strategy

Canceling the sale prompted a reevaluation of Vivint’s strategy. In the immediate aftermath, then-CEO Greg Butterfield pledged to continue the pursuit of growth. He left the company in May, and Bywater, then Vivint Smart Home’s chief operating officer, was named interim CEO.

Bywater soon changed the company’s trajectory, seeking to pursue per-watt profitability and “sustainable growth,” over a growth-at-all-cost strategy. He also began talking up Vivint Solar’s original strategy -- collaborating with Vivint Smart Home -- an idea that got less attention after the company’s 2014 initial public offering.

The installer’s “focus was diluted,” Bywater said.

Shareholders have yet to respond. The stock is down more than 40 percent since the SunEdison deal was scuttled, and has been mostly flat since Bywater came aboard.

“We’ve yet to see the benefit,” Michael Morosi, an analyst at Avondale Partners LLC in Nashville, said in an interview. “Maybe flat is the new up in solar.”

The company made Bywater the permanent CEO in December, in part because of his tenure at Vivint Smart Home. “The reason I’m in this role, I bridge that,” he said. “I bring value.”

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