What is the total value of the business combination?

The total value of the business combination, as indicated by the Merger Agreement, is approximately $5.095 billion. This figure is subject to adjustments based on Vertiv Holdings' cash, outstanding indebtedness, transaction expenses, and the costs associated with a representation and warranty insurance policy.

How is the purchase price being funded?

The purchase price is funded through a combination of cash and stock. A significant portion is from a $1.239 billion PIPE investment in Class A common stock. The remaining consideration is paid in cash (initially $415 million, subject to adjustments related to redemptions and other items) and newly issued shares of Class A common stock valued at $10.00 per share.

What is the purpose of the Tax Receivable Agreement (TRA)?

The Tax Receivable Agreement is designed to allow the former Vertiv Holdings stockholder to share in the tax benefits the combined company may realize from certain pre-transaction tax attributes. The combined company will pay the former stockholder 65% of the realized cash tax savings resulting from increased tax basis in intangible assets, R&D credits, and business combination expenses, while retaining 35%.

What are the key conditions that must be met for the business combination to close?

Several conditions must be satisfied for the business combination to close. These include approval by GS Acquisition Holdings Corp's stockholders, clearance under antitrust laws (like HSR), a minimum of $1.375 billion in aggregate cash from the trust account and the PIPE investment, and the approval of the combined company's Class A common stock for listing on the NYSE. Additionally, certain consents related to Vertiv Holdings' existing credit agreements must be obtained.

VRT 8-K: Material Agreements & Securities & Listing

Summary

This 8-K/A filing by GS Acquisition Holdings Corp (now Vertiv Holdings Co) provides an amendment and supplement to its previously filed 8-K, detailing the definitive agreement for a business combination with Vertiv Holdings, LLC. The core of the filing outlines the structure of the merger, a significant PIPE investment, and various ancillary agreements. Key for investors is the transaction valuation, set at approximately $5.095 billion, subject to adjustments for cash, debt, transaction expenses, and potential share redemptions. The deal includes a substantial $1.239 billion PIPE financing, which is crucial for closing the transaction and ensuring sufficient capital. The filing also details important post-closing governance and financial arrangements, including a Tax Receivable Agreement and a Stockholders Agreement that will impact the ownership and board representation structure of the combined entity.

Key Highlights

1Definitive Agreement for Business Combination: GS Acquisition Holdings Corp has finalized the Agreement and Plan of Merger with Vertiv Holdings, LLC, outlining the terms of the business combination.
2Transaction Valuation: The business combination values Vertiv Holdings at approximately $5.095 billion, subject to customary adjustments for cash, debt, transaction expenses, and potential stockholder redemptions.
3Significant PIPE Investment: A Private Investment in Public Equity (PIPE) of $1.239 billion has been secured through subscription agreements with various investors and certain Vertiv executives, crucial for funding the transaction.
4Merger Consideration Structure: The consideration paid to Vertiv Holdings' sole stockholder will be a combination of cash ($415 million, subject to adjustments) and stock, with the stock component determined by the remaining purchase price divided by $10.00 per share.
5Tax Receivable Agreement (TRA): A TRA will be entered into, under which Vertiv Holdings' former stockholder will receive 65% of certain tax savings realized by the combined company from specific tax attributes, potentially impacting future cash flows.
6Stockholders Agreement and Governance: A Stockholders Agreement will govern post-closing matters, including transfer restrictions on Vertiv's shares and detailed board nomination rights for the Vertiv Stockholder based on their ownership percentage.
7Conditions to Closing: Key conditions include stockholder approval, Hart-Scott-Rodino clearance, a minimum cash requirement of $1.375 billion (from trust account and PIPE), and NYSE listing approval for the combined company's stock.

Vertiv Holdings Co 8-K/A Report, Material Agreement (Dec 13, 2019)

Summary

Key Highlights

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