GS Acquisition Holdings (GSAH), announced this morning that they have signed a definitive agreement to combine with Vertiv Holdings LLC, a Platinum Equity portfolio company, and a global provider of critical digital infrastructure and continuity solutions. David Cote, CEO of GSAH, will serve as Executive Chairman of Vertiv, and Vertiv’s existing management team will continue to be led by 30-year industry veteran CEO Rob Johnson.
The transaction is expected to close in the first quarter of 2020, and at close Vertiv’s stock will trade under the ticker symbol NYSE: VRT. Additionally, Vertiv will have an anticipated pro forma enterprise value of approximately $5.3 billion, or 8.9x the company’s estimated 2020 pro forma Adjusted EBITDA of approximately $595 million.
As for additional details on Vertiv business, they deliver “the hardware, software, analytics and ongoing services customers rely on to enable their vital applications to run continuously, perform optimally and grow with their business needs. The company’s portfolio of power, thermal and IT management along with cooling and IT infrastructure solutions and services that extend from the cloud to the edge of the network, generated nearly $4.3 billion in revenue in 2018.”
Transaction Summary
After giving effect to any redemptions, the balance of the approximately $705 million in cash held in GSAH’s trust account, together with $1.239 billion in private placement proceeds, will be used to pay $415 million cash consideration (subject to certain adjustments) to Vertiv stockholders, pay transaction expenses and reduce Vertiv’s existing indebtedness to up to 3.6x 2019 estimated pro forma Adjusted EBITDA.
Quick takes: While we have a press release and a presentation, we still do not have a super 8-K with all of the various filed agreements, so we’re going to have to wait to get all the finer details on this transaction. But at it’s core, this is a deleveraging transaction with a lot of cash ($415 million) going to Vertiv shareholders. That $1.2 billion dollar PIPE appears to be done at $10.00, but again, without the filed agreements, we don’t know if there are any sweeteners to bring the effective cost down. This deal should initially pop partially based on the names attached (David Cote, Goldman Sachs, Platinum Equity – Gores), but it hard to say just yet if this is a clear cut winner. However, on the face of it, digital infrastructure is a solid industry and Vertiv stacks up well to the comps. So far, so good. Let’s get those additional details though….
CONFERENCE CALL
Tuesday, December 10, 2019 starting at 10:30 a.m. ET
The call can be accessed by dialing 1-877-883-0383 (domestic toll-free number) or 1-412-902-6506 (international) and providing the conference ID: 8567556, or asking for the GSAH-Vertiv transaction announcement call.
The live webcast of the investor call as well as related presentation materials will be available at https://www.gsacquisition.com/.
A replay of the teleconference and webcast will also be available for approximately 30 days at https://www.gsacquisition.com/.
ADVISORS
- Goldman Sachs & Co. LLC acted as lead placement agent and exclusive financial advisor to GSAH.
- J.P. Morgan Securities LLC acted as financial advisor to Vertiv.
- Skadden, Arps, Slate, Meagher & Flom LLP acted as legal advisor to GSAH.
- Morgan, Lewis & Bockius, LLP and Gibson, Dunn & Crutcher LLP acted as joint legal advisors to Platinum Equity and Vertiv.
With the passage this weekend of $95 billion in funding for Ukraine, Israel and Taiwan by the House of Representatives, some focus has gone back towards the defense sector, which has generally had a good year as a whole. But, SPACs have not been as active in defense, despite the fact that companies in the...
At the SPAC of Dawn As April’s sleepy month for SPAC news continues, there is only one special meeting on the docket to consider a SPAC deal approval, that being today’s vote on Pegasus Digital Mobility‘s (NYSE:PGSS) combination with equipment manufacturer Schmid. Three more SPACs are facing extension votes this week, including Pyrophyte (NYSE:PHYT), whose...
Terms Tracker for the Week Ending April 19, 2024 Welcome to our weekly column where we discuss the findings from our IPO terms tracker based on the previous week’s pricings. Passover and school spring break starts next week, which most likely means a slowdown in SPAC filing activity. Although Churchill IX is now rumored to...
Despite a week of general pull-backs in the market, fintech firm Ibotta (NYSE:IBTA) nonetheless took the dive and had a good week debuting via a traditional IPO in the choppy waters. The company, which provides app-based consumer cashback discounts on purchases, priced its IPO at $88, above its proposed range of $76 to $84, and...
At the SPAC of Dawn Happy Friday! SPACInsider has unveiled new presets on SPAC Performance accessible via the Data drop-down to easily sort for the highest and lowest performing active SPACs and de-SPACs. On the de-SPAC side, Vertiv (NYSE:VRT) continues to be well ahead of the pack, logging a 710% return by share price adjusted...