Vivint’s $2.5 Billion ReFi, Owlet “IPO,” Draper’s Secret Fintech, and More (Week-in-Review Highlights, July 10—16, 2021)
A "Personal Note from David:" Sometimes life goes crazy, in a good way — like last week. So apologies that this Week-in-Review didn’t get published until Tuesday. BUT … there’s good stuff here.
At the risk of suggesting that a $2.5 billion re-financing is ho-hum, once a firm gets to a certain size / stature, that’s exactly what it is … a bit ho-hum.
Nevertheless, $2.5 billion ain’t nothing, regardless of the organization.
And $2.5 billion is the amount of money raised by Vivint Smart Home last week when one of its subsidiaries (APX Group) completed three separate but related transactions (as expected) and originally reported by Deseret Business Watch on July 2nd.
All told, Vivint raised
$800 million through a private placement of “senior notes” that are due in 2029;
“A new $350.0 million senior secured revolving credit facility;” and
A new $1.35 billion “senior secured first lien term loan facility” that will mature in July 2028.
Additionally, the company reduced its overall annual interest payments by $50 million and extended its indebtedness by an average of 3.5 years.
Bottom line, through Wall Street “wheeling and dealing,” Vivint’s balance sheet just got a bit healthier.
SPAC Merger Done, Owlet Now a Public Company
After announcing last Thursday that it had completed its merger with Sandbridge Acquisition Company, Owlet officially became a publicly traded company on Friday, July 16 (NYSE:OWLT, OWLT-WT).
As reported by Deseret Business Watch in late February, Owlet’s decision to “go public” via a merger with a Special Purpose Acquisition Company (aka, a SPAC) gave Owlet a pre-merger valuation of over $1 billion. And the intent was that Owlet would have 132 million shares outstanding once it went public.
As technical as public offerings are, however (and trust me, you have to be pretty wonky to track and understand all the legal and financial ins and outs of a traditional IPO), going public through what’s also known as a Blank Check Merger is even trickier.
So … officially, Lehi, Utah-based Owlet is now a public company, with shares listed on the New York Stock Exchange.
Owlet stock closed its first trading day at $9.03 per share, giving the company an anticipated initial market valuation of just under $1.2 billion.
However, in the Owlet/Sandbridge Investor Presentation, Owlet was supposed to net $325 million from its SPAC-merger post-merger, and that does not appear to be the case. In fact, most news reports place Owlet’s post-merger haul to be closer to $135 million, roughly $190 million below the projected target from the Investor Presentation.
Unfortunately, given the fact that Owlet is officially still in the Quiet Period surrounding its Public Offering, it’s virtually impossible to gain any additional information about the company beyond what has been publicly disclosed thus far.
So for now, we are holding off on even attempting to uncover pursuing additional insights into the gap between the projected and apparent actual gains from the merger.
In the meantime, everything else about Owlet looks quite rosy to me.
In fact, its management team was quite smart to distribute a quarterly earnings news release in mid-May, something it did not have to do, legally, as a then private company.
But at the time, Owlet announced
Its year-over-year revenue for Q1 2021 had grown to $21.9 million, a 47% increase over sales for the comparable quarter in 2020; and
Its gross margin had jumped to 58%, an 11% increase on a YoY basis.
Owlet’s projections for future growth also look quite rosy. So I suspect the Owlet story is gonna be fairly interesting to track over the next 12 to 36 months.
Who the Heck is PROG Holdings? And Where in the _______ Did they Come From?
As might be expected I have a number of “tricks” that I use to stay on-top-of what’s happening throughout the State of Deseret and its overall business community.
As it turns out, after living and working in Utah’s Public Relations, Marketing, and Media industries for over two decades, you start to get a sense of Who’s Who and What’s What.
But occasionally, I get surprised — like last week when a news release hit my in-box for a publicly traded company based in Draper, Utah that I’d never heard of: PROG Holdings.
The fact that I’d never heard of PROG wasn’t the main thing, however. The main thing was that PROG presently has a market valuation of over $3 billion.
SAY WHAT?!?!?!
A $3 billion publicly traded Financial Technology firm in Utah, let alone Draper? That I’ve never even heard of? WTH?!?!
So … I did some digging, and here’s what I discovered.
21-Year-Old PROG Holdings
Turns out that PROG Holdings got its start back in 1999 as an alternative financing company known as Progressive Leasing.
Simply put, the Progressive business model focused on helping financially challenged consumers buy goods and services on credit.
Publicly traded Aaron’s (NYSE:AAN) acquired Progressive in 2014, and it had been run/operated since then as a wholly owned subsidiary … until last year when Aaron’s decided to spin-off Progressive into its own publicly traded entity known as PROG Holdings (NYSE:PRG).
And that spin-out was completed on December 1, 2020.
In other words, no publicly traded FinTech with a Market Cap of $3 billion-plus existed in Draper prior to last December.
Phew! I thought I was losing my mind.
Interestingly, PROG’sFinTech services and monies are currently used by over 30,000 retailers across the U.S.
And the news release that started this entire section of this issue of Deseret Business Watch?
Turns out that PROG announced last week it had acquired Miami, Florida-based Four Technologies, a FinTech that helps retailers offer their clientele with the option to make purchases with four payments, interest free.
BTW: Financial terms of the transaction were not disclosed.
But now I know who PROG Holdings is … and so do you.
News Items of Note from This Week
What follows below are five additional Noteworthy News Items taken from the breaking news announcements that hit our radar recently from Utah’s business community last week, news items we thought you might find worthwhile if not also intriguing.
Case in point —
Facebook’s $1 Billion Eagle Mountain Data Center Now Operational
In May 2018, Facebook announced it would build a massive datacenter on the outskirts of the core Wasatch Front in Eagle Mountain, Utah.
Today, the Facebook datacenter is reality, with the company having spent over $1 billion on one of its now 17 Medusa-like, server / storage brains around the globe yet based right here in the land of Deseret.
As noted in the news report below by FOX 13, Facebook plans to continue to expand this data center.
Hill Air Force Base and Rocky Mountain Power Complete New 350kW Solar Array
Any questions you might have had about the long-term viability of commercial solar power would probably be erased after learning that Rocky Mountain Power has just completed a 350 Kilowatt (350kW) Blue Sky Solar Project on Hill Air Force Base in northern Davis County.
Details on the launch of the new installation can be found here.
American Fork, Utah to Become U.S. Headquarters for Top Supplement Manufacturer in the Asia-Pacific Region
Ranked in 2021 as the No. 1 supplement manufacturer in the Asia-Pacific region by The Financial Times, Taipei, Taiwan-based TCI Co., Ltd. announced last week that American Fork, Utah will become its United States headquarters.
Through two separate yet related press releases, TCI (8436.TWO) and Denver, Colorado-based NewAge (NasdaqGS:NBEV) announced last week that the two firms had formed what they hope will become a significant manufacturing partnership. {Here’s a link to the NewAge news release.}
Under terms of the agreement, TCI will
Pay NewAge $3.5 million for its 538,000-square-foot manufacturing facilities and offices in American Fork;
Take over Utah-based manufacturing of NewAge products for the Colorado company in the next three months;
Continue manufacturing products for other companies at its new American Fork facilities; and
Provide a share of revenue from its American Fork operations to NewAge over the next five years.
Conversely, NewAge
Will continue to manufacture and bottle its Tahitian Noni beverages in its facilities in Tahiti; and
Anticipates it will begin offering TCI-developed products through NewAge’s network of over 400,000 distributors and retail partners around the world.
Founded in 1980, TCI has nearly $300 million (US) in annual revenue and over 1,100 employees worldwide.
Additionally, TCI anticipates revenue from its American Fork facilities will reach over $105 million by 2023.
{NOTE: TCI’s shares are listed on the Taiwan Stock Exchange. As such, most, if not all, online financial publishers will list the value of TCI’s shares in New Taiwan dollars and not in U.S. dollars.}
iFIT Acquires Sweat, a Top Digital Fitness App for Women
Logan, Utah-based iFIT Health & Fitness (formerly known as ICON Health + Fitness) announced last week it has acquired Adelaide, Australia-based Sweat, a leading digital fitness app for women.
Sweat — fantastic name, by the way — is presently ranked #160 in the Health and Fitness category on Apple’sApp Store.
According to the news release, Sweat has a
“… a global community of over 50 million women across its social channels …”
Not bad.
USANA Named the Official Nutritional Supplement Supplier of USA Skateboarding
Last of all, USANA announced last week that it is now the Official Nutritional Supplement Supplier of USA Skateboarding.
Given that the very first skateboarding competitions will be held in Summer Olympics history in the weeks ahead in Tokyo and nearby venues, I close this issue with this:
USA! USA! USA!
Good luck to all Olympians for a successful and safe 2021 Games.
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About the Author
David Politis is a Marketing Mercenary, which is a fancy way of saying that organizations and individuals hire him to solve their marketing problems. To learn more, please feel free to visit David’s LinkedIn Profile or the website for his business: The David Politis Company. If you have a story idea for him (or would just like to connect), you can reach him at me@davidpolitis.com.