(Reuters) - Vivint Smart Home Inc, a home automation company backed by Blackstone Group (BX.N), on Monday agreed to merge with a company funded by a unit of Japan’s SoftBank Corp (9434.T) to create a firm with an enterprise value of $5.6 billion.
Vivint makes a range of smart home security products that help in controlling other automation gadgets, such as Amazon Echo and Google Home, through a central touchscreen panel.
Mosaic Acquisition Corp (MOSC.N), formed by SoftBank unit Fortress Investment Group for making acquisitions, will take on the Vivint name after the deal closure, latest by the first quarter of 2020.
Blackstone, which bought Vivint in 2012 for more than $2 billion, will retain its investment in the company and invest an additional $100 million.
SoftBank will also invest $125 million in the common stock of Mosaic before the close of the deal.
Blackstone and other existing investors of Vivint are expected to own about 78% of the combined company.
J.P. Morgan Securities LLC, Evercore and Blackstone Capital Markets are acting as financial advisers to Vivint, while Mosaic is being advised by Deutsche Bank Securities, Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC and RBC Capital Markets LLC.
Simpson Thacher & Bartlett LLP is acting as legal counsel to Vivint and Paul, Weiss, Rifkind, Wharton & Garrison LLP is acting as legal counsel to Mosaic.
Reporting by Supantha Mukherjee and Vibhuti Sharma in Bengaluru; Editing by Shailesh Kuber