8-KOther EventsExhibits & Filings

Vertiv Holdings Co 8-K Report, Corporate Update (Dec 17, 2020)

Filed December 17, 2020For Securities:VRT

Summary

Vertiv Holdings Co (VRT) announced on December 17, 2020, its decision to redeem all outstanding Public Warrants. The redemption date is set for January 18, 2021. This move is intended to strengthen the company's balance sheet by utilizing the cash proceeds from the warrant redemption and any elective exercises. The company anticipates that this action will reduce its net leverage to below 3.0X and significantly fortify its liquidity position, potentially bringing it close to $1 billion. While a minimal dilutive impact on adjusted earnings per share in 2021 is expected, management views this as a strategic step to enhance financial flexibility during ongoing global economic uncertainty, without immediate specific use plans for the excess cash.

Key Highlights

  • 1Vertiv Holdings Co (VRT) is redeeming all outstanding Public Warrants, with a redemption date of January 18, 2021.
  • 2The redemption aims to improve the company's financial position by strengthening liquidity and reducing net leverage.
  • 3Net leverage is expected to fall below 3.0X as a result of this action.
  • 4The company anticipates its liquidity position to approach $1 billion post-redemption.
  • 5A minimal dilutive impact on adjusted earnings per share for 2021 is projected.
  • 6Proceeds will be held on the balance sheet to strengthen liquidity and manage leverage, not for specific immediate use.
  • 7As of December 16, 2020, approximately 11.4 million public warrants had been exercised.

Frequently Asked Questions

Public Warrants were issued as part of Vertiv's initial public offering, giving holders the right to purchase shares of Class A common stock. Vertiv is redeeming them to strengthen its balance sheet, reduce net leverage, and enhance its liquidity position.

The redemption date for the Public Warrants is January 18, 2021. Holders must decide whether to exercise their warrants before this date to avoid automatic redemption.

Vertiv expects to significantly reduce its net leverage to below 3.0X and bolster its liquidity to nearly $1 billion. There is a minor anticipated dilutive effect on adjusted earnings per share in 2021.

The cash proceeds from the redemption, along with any cash from elective exercises, will be held on the company's balance sheet to strengthen liquidity and reduce net leverage. While there are no specific immediate use plans, the company aims to maintain financial discipline and a strong balance sheet.