Vertiv Holdings, Llc · NYSE:VRT
Vertiv — Merger or Acquisition (September 2021)
25 slides from Vertiv's merger presentation, Sep 8, 2021
Slide 1: Vertiv to Acquire E&I Engineering
Vertiv to Acquire E&I Engineering September 8, 2021 Architects of Continuity™
Slide 2: Cautionary Statement Regarding Forward-Looking Statements
Cautionary Statement Regarding Forward-Looking Statements This presentation, and other statements that Vertiv Holdings Co. (“Vertiv” or “Company”) may make in connection therewith, may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act. This include
Slide 3: Key Messages
Key Messages Announcing strategic acquisition of E&I Engineering, significantly expanding Vertiv’s offering and expected to drive immediate financial benefits; an exciting opportunity for the company Market demand environment for core Vertiv business remains strong, but temporary critical electronic
Slide 4: Business Conditions Update
Business Conditions Update eave IV.
Slide 5: Customer Demand and Supply Chain Update
Customer Demand and Supply Chain Update CUSTOMER DEMAND SUPPLY CHAIN & PRICING UPDATE • Overall market demand remains robust and consistent • Supply chain challenges trending worse than expected with expectations. July and August orders up ~12% compared to same period last year Critical part short
Slide 6: Revised Third Quarter 2021 Financial Guidance
Revised Third Quarter 2021 Financial Guidance $Millions; midpoint of guidance range unless otherwise specified Net Sales Adj. Operating Profit Adj. Operating Margin Adjusted EPS Down $50M Down $30M Down 190 bps Down $0.10 (Dow n $45M w /M&A) (Dow n 320 bps w /M&A) (Dow n $0.14 w /M&A) 1,280 1,230 1,
Slide 7: Revised Full Year 2021 Financial Guidance
Revised Full Year 2021 Financial Guidance $Millions; midpoint of guidance range unless otherwise specified Net Sales Adj. Operating Profit Adj. Operating Margin Adjusted EPS Free Cash Flow Down $90M Down $60M Down 100 bps Down $0.16 Down $95M (Dow n $45M w /M&A) (Dow n $115M w /M&A) (Dow n 220 bps w
Slide 8: E&I Acquisition Update
E&I Acquisition Update eave IV.
Slide 9: Acquisition Highlights
Acquisition Highlights Acquiring E&I Engineering (“E&I”) for ~$1.8 billion (65% cash and 35% equity) plus potential earn -out of up to $200 million cash based on near-term profitability milestones E&I is a leading independent provider of switchgear, busway and modular power units serving data center
Slide 10: Transaction Overview
Transaction Overview Financial Highlights Purchase Enterprise value of $1.8 billion (upfront purchase price) Up to $200 million earn-out based on achievement of 2022E EBITDA Price thresholds 25%+ EBITDA Margin Upfront: $1,170 million cash (65%), ~$630 million stock (35%) Consideration – Financ
Slide 11: Strong Accretive Underlying Financials and Trajectory
Strong Accretive Underlying Financials and Trajectory E&I Net Sales ($ Million) Commentary 23% net sales CAGR from 2017 – 2020 CAGR ~$570 General Earn-out based on 2022E EBITDA $481 ~$460 Commentary – $100 million if >$146 million +23% – Additional $100 million if $156 million $257 Net Sales:
Slide 12: E&I – A Leading Provider of Electrical Switchgear, Busway and Modular Power Solutions
E&I – A Leading Provider of Electrical Switchgear, Busway and Modular Power Solutions Sales Breakdown Privately owned; founded in 1986 by Philip O'Doherty ~15% Geography Europe Focused on Data Center and Vital Commercial and Industrial Market Segments North America ~55% Middle East ~35% Headqu
Slide 13: Expands Vertiv's Addressable Market by $7 Billion
Expands Vertiv’s Addressable Market by $7 Billion E&I is a market leader in providing Switchgear, Busway and Modular Power Solutions for Data Center and vital C&I applications E&I competes effectively with larger players given speed, product innovation and customer responsiveness Targeted, ser
Slide 14: Meaningfully Completes Vertiv's Data Center Critical Infrastructure Portfolio
Meaningfully Completes Vertiv’s Data Center Critical Infrastructure Portfolio Data Center Critical Power Infrastructure Critical Static Power Modular UPS Input UPS Output Remote EMS Power UPS Transfer Distribution Busway Rack PDU Power Services Switchgear Switchgear Power Panel Software Switchgear S
Slide 15: Comprehensive Offering Provides Customers One-Stop Solution
Comprehensive Offering Provides Customers “One-Stop” Solution For All Types of Data Center Deployments Traditional Data Center Modular Power Skid / Data Center Switchgear UPS System UPS System Switchgear Busway Switchgear Busway Legend E&I Products Vertiv Products UPS Systems Confidential. Property
Slide 16: Combination Enables Enhanced Power Growth Opportunities
Combination Enables Enhanced Power Growth Opportunities Significant revenue synergy potential from combination Broadens Power Expands further upstream reach through power infrastructure Infrastructure Portfolio Potential to provide comprehensive offering to customers Additional upfront project
Slide 17: Integration Planning Activities Have Commenced
Integration Planning Activities Have Commenced Principles we are following: Establishing regular cadence of meetings to review progress and key metrics: pre-acquisition, 30, 60, 90 day and quarterly thereafter Multiple workstreams already identified All workstreams will have one dedicated, ful
Slide 18: Attractive Synergy Opportunities
Attractive Synergy Opportunities Cost Synergies Revenue Synergies Increase opportunity with large global strategic Procurement ~45% accounts particularly in modular solutions Expand E&I’s customer reach to broader set of Manufacturing ~45% Colocation and Enterprise switchgear and Busway customer
Slide 19: Meaningfully Enhances Vertiv's Financial Profile
Meaningfully Enhances Vertiv’s Financial Profile Long-Term Organic Growth Adj. Operating Margin Adj. EPS Pro Forma Net Leverage (3) (2) 3.4x 12.5% 7.0% +10¢ (1) 6.5% 11.0% 2.3x Vertiv Pro Forma Vertiv 2021E Pro Forma 2021E Pro Forma 2022E At Close Year-End 2022E E&I ~25% margin plus Significant reve
Slide 20: Key Messages
Key Messages Announcing strategic acquisition of E&I Engineering, significantly expanding Vertiv’s offering and expected to drive immediate financial benefits; an exciting opportunity for the company Market demand environment for core Vertiv business remains strong, but temporary critical electronic
Slide 21: Non-GAAP financial reconciliations
Non-GAAP financial reconciliations
Slide 22: Non-GAAP Financial Measures – Revised Third Quarter Guidance
Non-GAAP Financial Measures – Revised Third Quarter Guidance Third quarter 2021 reflects midpoint of guidance range Reconciliation of GAAP diluted EPS to Non-GAAP adjusted diluted EPS and operating profit (loss) to adjusted operating profit (loss)(4) Operating profit Interest Change in Income tax ($
Slide 23: Non-GAAP Financial Measures – Revised Fourth Quarter Guidance
Non-GAAP Financial Measures – Revised Fourth Quarter Guidance Fourth quarter 2021 reflects midpoint of guidance range Reconciliation of GAAP diluted EPS to Non-GAAP adjusted diluted EPS and operating profit (loss) to adjusted operating profit (loss)(4) Operating profit Interest Change in Income tax
Slide 24: Non-GAAP Financial Measures – Revised Full Year Guidance
Non-GAAP Financial Measures – Revised Full Year Guidance Full year 2021 at midpoint of guidance range Reconciliation of GAAP diluted EPS to Non-GAAP adjusted diluted EPS and operating profit (loss) to adjusted operating profit (loss)(4) Loss on Operating profit Interest extinguishment Change in Inco
Slide 25: Slide 25