Per December 18th amendment to transaction terms, Vivint is
now valued at $4.2 billion in enterprise value, including an
additional $100 million equity commitment
Total new equity commitments (in addition to Mosaic’s
existing cash in trust), including forward purchase commitments,
PIPE investments and backstop commitments are now $475
million
Mosaic Acquisition Corp.’s Special Meeting of Stockholders
will be held on January 17, 2020
Vivint Smart Home, Inc. (“Vivint”) and Mosaic Acquisition Corp.
(NYSE: MOSC; “Mosaic”) today updated investors about the Mosaic
Special Meeting of Stockholders to be held on January 17, 2020.
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20200106005365/en/
As previously announced on December 18, 2019, Vivint and Mosaic
entered into an amendment to the definitive agreement to merge
Vivint with a subsidiary of Mosaic (the “Amendment”).
In connection with the Amendment:
- The initial enterprise value attributed to Vivint was reduced
to approximately $4.2 billion, implying an estimated 2020 Adjusted
EBITDA multiple of approximately 7.75x pre-money, or 7.92x
post-money.
- Affiliates of Fortress Investment Group LLC (“Fortress”) agreed
to invest up to an additional $50 million in Vivint through an
investment in the common stock of Mosaic, through open market
purchases or directly from Mosaic, prior to the closing of the
merger. This investment is in addition to the $125 million
investment in Vivint that Fortress affiliates committed to make at
the time of the initial announcement of the transaction in
September, and is in addition to pre-existing investments in Mosaic
held by Fortress affiliates.
- An investor who is investing in Vivint pursuant to forward
purchase commitments obtained in connection with Mosaic’s IPO has
agreed to invest an additional $50 million in Vivint through an
investment in the common stock of Mosaic prior to the closing of
the merger.
- Pro forma net leverage reduced from 5.2x to 3.9x LTM 9/30/2019
Covenant Adjusted EBITDA, with substantially all net proceeds
expected to be used to repay debt, assuming no redemptions by
Mosaic’s public stockholders.
David Maura, Executive Chairman and Chief Executive Officer of
Mosaic, said, “Vivint is a dynamic and fast growing smart home
business that differentiates its offering through a fully
integrated platform that unifies the customer experience in an
efficient, seamless and simple way. Vivint’s strong subscriber
momentum, compelling unit economics, and multiple levers for
organic growth represent a phenomenal opportunity to be at the
cutting edge of technology that is changing the way we live.
Mosaic, Vivint, Fortress and Blackstone are aligned in taking a
long-term view of value creation, and we have amended the
transaction to encourage the contribution of additional proceeds to
Vivint’s balance sheet. The amended terms will support maximum
deleveraging and promote sustainable, long-term growth at
Vivint.”
Mr. Maura concluded, “I want to thank our anchor investors and
our partners at Fortress for the incremental $100 million of common
equity capital committed to the deal.”
Drew McKnight, Managing Partner of Fortress Investment Group
LLC, commented, “We believe Vivint is extraordinarily well
positioned as a leading IoT and connected-device business. We are
extremely excited about this investment and believe we are at an
attractive entry point as the company continues to build on its
position of recognized leadership and innovation shaping the
connected world of tomorrow.”
Todd Pedersen, Founder and CEO of Vivint, commented, “Vivint is
in the early stages of a massive opportunity and is ready to
capitalize on this growth potential. The revised valuation and
additional proceeds from this transaction will help fortify our
balance sheet, drive future growth and increase our public
float.”
Peter Wallace, Senior Managing Director of Blackstone added,
“The revised transaction structure and valuation not only further
de-levers the balance sheet but also creates an attractive
valuation for new shareholders. We will continue to be the largest
existing shareholder of Vivint and are excited about its future
growth potential.”
Blackstone and other existing investors of Vivint are expected
to own a majority of the outstanding shares of Vivint immediately
following the merger. Assuming Blackstone’s previously announced
investment, no redemptions by Mosaic’s public stockholders and
further assuming that the Fortress affiliate’s additional
investment of up to $50 million will be consummated through a
private placement of newly issued shares of Mosaic common stock,
there will be in total approximately $790 million of net cash
proceeds at closing, including (i) the $150 million of forward
purchase commitments obtained in connection with Mosaic’s IPO, (ii)
the previously announced $125 million investment in Vivint by
Fortress affiliates, (iii) the previously announced $100 million
investment in Vivint by Blackstone, (iv) the additional investment
of up to $50 million by Fortress affiliates and (v) the additional
$50 million investment from a forward purchaser. The net cash
proceeds are expected to be used to pay down a portion of the
existing Vivint debt and for working capital and general corporate
purposes.
Mosaic Special Meeting to be Held on January 17, 2020
Mosaic Acquisition Corp. intends to convene and then adjourn,
without conducting any other business, the adjourned special
meeting of stockholders scheduled to be held on Tuesday, January
14, 2020 until Friday, January 17, 2020 at 8:00 a.m. Eastern Time,
at the offices of Paul, Weiss, Rifkind, Wharton & Garrison LLP
at 1285 Avenue of the Americas, New York, New York 10019.
In connection with the adjournment, Mosaic is extending the
deadline for holders of its Class A common stock to submit their
shares for redemption to 5:00 p.m. Eastern Time on Wednesday,
January 15, 2020. Stockholders who wish to withdraw their
redemption request may do so by requesting that the transfer agent
return such shares.
About Vivint Smart Home
Vivint Smart Home is a leading smart home company in North
America. Vivint delivers an integrated smart home system with
in-home consultation, professional installation and support
delivered by its Smart Home Pros, as well as 24/7 customer care and
monitoring. Dedicated to redefining the home experience with
intelligent products and services, Vivint serves more than 1.5
million customers throughout the United States and Canada. For more
information, visit www.vivint.com.
About Mosaic Acquisition Corp.
Mosaic Acquisition Corp. is a special purpose acquisition
company formed by Mosaic Sponsor, LLC and Fortress Mosaic Sponsor
LLC for the purpose of effecting a merger, share exchange, asset
acquisition, share purchase, reorganization or similar business
combination with one or more businesses. For more information,
visit www.mosaicac.com.
IMPORTANT ADDITIONAL INFORMATION AND WHERE TO FIND IT
This communication is being made in respect of the proposed
merger transaction involving Mosaic and Vivint. Mosaic filed a
registration statement on Form S-4 (as amended, the “Registration
Statement”) with the SEC, which includes a proxy statement of
Mosaic, a consent solicitation statement of Vivint and a prospectus
of Mosaic, and each party will file or has filed other documents
with the SEC regarding the proposed transaction. Beginning on
December 3, 2019, a definitive proxy statement/consent solicitation
statement/prospectus was sent to the stockholders of Mosaic and
Vivint. As a result of amendments made to the proposed merger
transaction on December 18, 2019, Mosaic filed post-effective
amendments to the Registration Statement, which include an updated
proxy statement/consent solicitation statement/prospectus.
Beginning on December 27, 2019, an updated definitive proxy
statement/consent solicitation/prospectus was sent to the
stockholders of Mosaic and Vivint, seeking any required stockholder
approval. Before making any voting or investment decision,
investors and security holders of Mosaic and Vivint are urged to
carefully read the entire Registration Statement and proxy
statement/consent solicitation statement/prospectus, including any
post-effective amendments or updates thereto, and any other
relevant documents filed with the SEC, as well as any amendments or
supplements to these documents, because they contain important
information about the proposed transaction. The documents filed by
Mosaic with the SEC may be obtained free of charge at the SEC’s
website at www.sec.gov. In addition, the documents filed by Mosaic
may be obtained free of charge from Mosaic at www.mosaicac.com.
Alternatively, these documents, when available, can be obtained
free of charge from Mosaic upon written request to Mosaic
Acquisition Corp., 375 Park Avenue, New York, New York 10152, Attn:
Secretary, or by calling (212) 763-0153.
Mosaic, Vivint and certain of their respective directors and
executive officers may be deemed to be participants in the
solicitation of proxies from the stockholders of Mosaic, in favor
of the approval of the merger. Information regarding Mosaic’s
directors and executive officers is contained in Mosaic’s Annual
Report on Form 10-K for the year ended December 31, 2018 and its
Quarterly Report on Form 10-Q for the quarterly periods ended March
31, 2019, June 30, 2019 and September 30, 2019, which are filed
with the SEC. Information regarding Vivint’s directors and
executive officers (who serve in equivalent roles at APX Group
Holdings, Inc.) is contained in APX Group Holdings, Inc. Annual
Report on Form 10-K/A for the year ended December 31, 2018 and its
Quarterly Report on Form 10-Q for the quarterly periods ended March
31, 2019, June 30, 2019 and September 30, 2019, which are filed
with the SEC. Additional information regarding the interests of
those participants and other persons who may be deemed participants
in the transaction may be obtained by reading the Registration
Statement and the proxy statement/consent solicitation
statement/prospectus and other relevant documents filed with the
SEC when they become available. Free copies of these documents may
be obtained as described in the preceding paragraph.
This communication does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of
any vote or approval, nor shall there be any sale of any securities
in any state or jurisdiction in which such offer, solicitation, or
sale would be unlawful prior to registration or qualification under
the securities laws of such other jurisdiction.
FORWARD-LOOKING STATEMENTS
This communication contains, and oral statements made from time
to time by our representatives may contain, forward-looking
statements including, but not limited to, Mosaic’s and Vivint’s
expectations or predictions of future conditions. Forward-looking
statements are inherently subject to risks, uncertainties and
assumptions. Generally, statements that are not historical facts,
including statements concerning our possible or assumed future
actions, business strategies, events or results of operations, are
forward-looking statements. These statements may be preceded by,
followed by or include the words “believes,” “estimates,”
“expects,” “projects,” “forecasts,” “may,” “will,” “should,”
“seeks,” “plans,” “scheduled,” “anticipates” or “intends” or
similar expressions. Such forward-looking statements involve risks
and uncertainties that may cause actual events, results or
performance to differ materially from those indicated by such
statements. Certain of these risks are identified and discussed in
Mosaic’s Registration Statement on Form S-4 under “Risk Factors”
and Form 10-K for the year ended December 31, 2018 under “Risk
Factors” in Part I, Item 1A. These risk factors will be important
to consider in determining future results and should be reviewed in
their entirety. These forward-looking statements are expressed in
good faith, and Mosaic and Vivint believe there is a reasonable
basis for them. However, there can be no assurance that the events,
results or trends identified in these forward-looking statements
will occur or be achieved. Forward-looking statements speak only as
of the date they are made, and neither Mosaic nor Vivint is under
any obligation, and expressly disclaim any obligation, to update,
alter or otherwise revise any forward-looking statement, whether as
a result of new information, future events or otherwise, except as
required by law. Readers should carefully review the statements set
forth in the reports, which Mosaic has filed or will file from time
to time with the SEC.
In addition to factors previously disclosed in Mosaic’s S-4 and
reports filed with the SEC and those identified elsewhere in this
communication, the following factors, among others, could cause
actual results to differ materially from forward-looking statements
or historical performance: ability to meet the closing conditions
to the merger; delay in closing the merger; failure to realize the
benefits expected from the proposed transaction; the effects of
pending and future legislation; risks related to disruption of
management time from ongoing business operations due to the
proposed transaction; business disruption following the
transaction; risks related to Mosaic’s or Vivint’s indebtedness;
other consequences associated with mergers, acquisitions and
divestitures and legislative and regulatory actions and reforms;
risks of the smart home and security industry, including risks of
and publicity surrounding the sales, subscriber origination and
retention process; the highly competitive nature of the smart home
and security industry and product introductions and promotional
activity by competitors; litigation, complaints, product liability
claims and/or adverse publicity; cost increases or shortages in
smart home and security technology products or components; the
introduction of unsuccessful new smart home services; privacy and
data protection laws, privacy or data breaches, or the loss of
data; the impact of the Vivint Flex Pay plan to Vivint’s business,
results of operations, financial condition, regulatory compliance
and customer experience; and Vivint’s ability to successfully
compete in retail sales channels.
Any financial projections in this communication are
forward-looking statements that are based on assumptions that are
inherently subject to significant uncertainties and contingencies,
many of which are beyond Mosaic’s and Vivint’s control. The
assumptions and estimates underlying the projected results are
inherently uncertain and are subject to a wide variety of
significant business, economic and competitive risks and
uncertainties that could cause actual results to differ materially
from those contained in the projections. The inclusion of
projections in this communication should not be regarded as an
indication that Mosaic and Vivint, or their representatives,
considered or consider the projections to be a reliable prediction
of future events.
Annualized, pro forma, projected and estimated numbers are used
for illustrative purpose only, are not forecasts and may not
reflect actual results.
This communication is not intended to be all-inclusive or to
contain all the information that a person may desire in considering
an investment in Mosaic and is not intended to form the basis of an
investment decision in Mosaic. All subsequent written and oral
forward-looking statements concerning Mosaic and Vivint, the
proposed transaction or other matters and attributable to Mosaic
and Vivint or any person acting on their behalf are expressly
qualified in their entirety by the cautionary statements above.
NON-GAAP FINANCIAL MEASURES
This press release includes Adjusted EBITDA, which is a
supplemental measure that is not required by, or presented in
accordance with, accounting principles generally accepted in the
United States (“GAAP”).
“Adjusted EBITDA” is defined as net income (loss) before
interest expense (net of interest income), income and franchise
taxes and depreciation and amortization (including amortization of
capitalized subscriber acquisition costs), further adjusted to
exclude the effects of stock based compensation, certain fees
related to Vivint Flex Pay program and certain unusual, non-cash,
non-recurring and other items.
“Covenant Adjusted EBITDA” is defined as net income (loss)
before interest expense (net of interest income), income and
franchise taxes and depreciation and amortization (including
amortization of capitalized subscriber acquisition costs), further
adjusted to exclude the effects of certain contract sales to third
parties, non-capitalized subscriber acquisition costs, stock based
compensation and certain unusual, non-cash, nonrecurring and other
items permitted in certain covenant calculations under the
agreements governing Vivint’s notes, the credit agreement governing
Vivint’s term loan and the credit agreement governing Vivint’s
revolving credit facility.
We believe that the presentation of Adjusted EBITDA is
appropriate to provide additional information to investors because
it is frequently used by securities analysts, investors, and other
interested parties in their evaluation of the operating performance
of companies in industries similar to ours. We caution investors
that amounts presented in accordance with our definition of
Adjusted EBITDA may not be comparable to similar measures disclosed
by other issuers, because not all issuers and analysts calculate
Adjusted EBITDA in the same manner.
Adjusted EBITDA is not a measurement of our financial
performance under GAAP and should not be considered as an
alternative to net loss or any other performance measures derived
in accordance with GAAP or as an alternative to cash flows from
operating activities as a measure of our liquidity.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200106005365/en/
For Vivint Investors Dale R.
Gerard, (801) 705-8011 dgerard@vivint.com
Media Liz Tanner, (801) 229-6956
liz.tanner@vivint.com
For Mosaic Investors William
H. Mitchell whmitchell@mosaicac.com
Media Sard Verbinnen & Co.
George Sard/David Millar (212) 687-8080
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