Vertiv Holdings, Llc · NYSE:VRT
Vertiv — SPAC Merger (December 2019)
22 slides from Vertiv's SPAC merger presentation, Dec 10, 2019
Slide 1: Announcement Call Presentation
Announcement Call Presentation December 2019
Slide 2: Disclaimer
Disclaimer INVESTOR ROADSHOW This investor presentation (the “presentation”) is for informational purposes only and does not constitute an offer to sell, a solicitation of an offer to buy, or a recommendation to purchase any equity, debt or other financial instruments of GS Acquisition Holdings Corp
Slide 3: Disclaimer (Cont'd)
Disclaimer (Cont’d) Use of Projections This presentation contains financial forecasts. Neither GSAH’s nor Vertiv’s independent auditors have studied, reviewed, compiled or performed any procedures with respect to the projections for the purpose of their inclusion in this presentation, and accordingl
Slide 4: Why We Believe Vertiv is a Good Investment
Why We Believe Vertiv is a Good Investment WELL POSITIONED UPSIDE POTENTIAL COMPELLING RISK REWARD Significant potential upside in growth and Great position in a good industry margins Multiple potential levers to create value • Vertiv is where Honeywell was after David • Solid organic growth outlook
Slide 5: Vertiv at a Glance
Vertiv at a Glance Pure-Play Full Service Provider of Digital Critical Infrastructure Solutions SALES EMPLOYEES CUSTOMERS MANUFACTURING SERVICE CENTERS REACH $4.3B ~19,700 25+ year relationships; Top SITES 270+ globally 130+ countries 50 customers represent 19 ~35% of revenue PORTFOLIO SEGMENT MARKE
Slide 6: Vertiv Offerings in the Data Center
Vertiv Offerings in the Data Center Comprehensive Product Portfolio Thermal Management: Air Handlers & Chillers Thermal Management: Condensers Power Management: UPS Systems Thermal Management Power Management: Power Distribution IT & Edge Infrastructure: Racks & Access Control Hardware Project Servi
Slide 7: Well Positioned: #1 in Most End-Markets Served
Well Positioned: #1 in Most End-Markets Served Focus is a Competitive Advantage IT AND EDGE INFRASTRUCTURE AND SERVICES & SOFTWARE POWER MANAGEMENT THERMAL MANAGEMENT SOLUTIONS (& IT MANAGEMENT) SOLUTIONS VERTIV VERTIV VERTIV VERTIV 16% 11% 12% 32% Schneider Schneider Other Schneider 11% 8% 48% 24%
Slide 8: Multiple Levers of Value Creation
Multiple Levers of Value Creation WELL POSITIONED UPSIDE POTENTIAL COMPELLING RISK Great position in a good Significant upside in REWARD industry growth and margins Multiple levers to create value Strong underlying growth trends within key Recurring service and product sales with a Above market grow
Slide 9: Data Boom: Key Driver of End-Market Growth
1 Data Boom: Key Driver of End-Market Growth Increased Digitization, Multiple Device Connection Adoption, and IoT ESTIMATED DATA CENTER IP TRAFFIC APPLICATIONS SECULAR TRENDS GROWTH DATA EXPLOSION Video Streaming 90% 175 ZB Created within last Expected to be created by two years 2025, up from 33 ZB
Slide 10: Leading Global Player
2 Leading Global Player Focus is a Competitive Advantage • Comprehensive portfolio offering with strong product capabilities that serve each submarket. • Competitors have consistently earned margins that are ~500bps higher than Vertiv. This transaction positions Vertiv to enhance margins over time.
Slide 11: Highly Recurring and Visible Revenues
3 Highly Recurring and Visible Revenues Growing Installed Base Flow & Recurring Based Revenue Project Based Revenue REPLACEMENT & EXPANSION LARGE SCALE DEPLOYMENT • IT & Edge Infrastructure and smaller • Initial large power, thermal and solutions scale power and thermal replacement build-out project
Slide 12: Entrenched, Long-Standing Customer Relationships
4 Entrenched, Long-Standing Customer Relationships Average Tenure and Breadth of Relationships Evidence Vertiv’s Leading Position OVERVIEW LONG STANDING RELATIONSHIPS WITH OUR CUSTOMERS • Highly diversified customer base with the top 50 customers representing ~35% of total sales in 2018 Data Center
Slide 13: Upside Potential: Improving Growth & Margins
5 Upside Potential: Improving Growth & Margins TOP LINE GROWTH INORGANIC VALUE CREATION Organic Growth Inorganic Growth • Pricing focus has just begun • Fragmented industry with opportunities for bolt-on M&A • Increasing focus on new product development • Product extensions / adjacencies • Service g
Slide 14: Summary Projected Financials
6 Summary Projected Financials Attractive Growth Profile HISTORICAL & PROJECTED ADJ. REVENUE ($M) & % GROWTH1 HISTORICAL & PROJECTED ADJ. EBITDA ($M) & % MARGIN¹ $640 $4,767 $595 $4,411 $4,575 $540 $4,290 $500 $502 $3,865 $3,911 $472 2016A 2017A 2018A 2019E 2020E 2021E 2016A 2017A 2018A 2019E 2020E
Slide 15: Appropriate Capital Structure at Close
7 Appropriate Capital Structure at Close Increased Flexibility with Opportunities for Further Improvement ILLUSTRATIVE PRO-FORMA CAPITALIZATION¹ NET LEVERAGE BASED ON 2019E ADJUSTED EBITDA Actual Pro-Forma US$ in Millions (30-Sept-2019) (31-Dec-2019E) Cash $ 149 $ 151 6.3 x Interest Rates Debt² Asse
Slide 16: We Believe Valuation is Attractive…
8 We Believe Valuation is Attractive… Discount to Peers 2019 EV/EBITDA Median: 15.0 x 17.7 x 17.6 x 16.1 x 15.2 x 15.0 x Attractive entry point with a deal 12.9 x 12.6 x 11.8 x 11.6 x 9.8 x valuation comparatively at discount to peers Vertiv APH ABBN GNRC LFUS LR SU HUBB TEL ETN • Large and growing
Slide 17: Why We Believe Vertiv is a Good Investment
Why We Believe Vertiv is a Good Investment Great position in a good industry Same position Honeywell was in after first 2-3 years Sales and margin growth upside Good capital structure and free cash flow Priced right 17
Slide 18: Additional Financial Information
ADDITIONAL FINANCIAL INFORMATION 18
Slide 19: Transaction Overview
Transaction Overview SUMMARY OF PROPOSED TERMS OF TRANSACTION AND TIMING • GS Acquisition Holdings Corp (“GSAH”) proposes to enter into a business combination with Vertiv Holdings, LLC through a reverse subsidiary merger Transaction • Following the merger, GSAH will be renamed Vertiv Holdings Co Str
Slide 20: Proposed Transaction Terms
Proposed Transaction Terms (USD in Millions, Except per Share Data) TRANSACTION SOURCES & USES SOURCES USES SPAC IPO Cash $ 690 Debt Paydown $ 1,464 PIPE Proceeds 1,239 Cash to Vertiv Shareholders 415 Total Sources $ 1,929 Estimated Transaction Costs 50 Total Uses $ 1,929 IMPLIED PRO-FORMA FIRM VALU
Slide 21: EBITDA Reconciliation
EBITDA Reconciliation EBITDA RECONCILIATION COMMENTARY ($M | FYE 12/31) 2016 2017 2018 a) Cost to achieve operational initiatives include transformation efforts and restructuring. Restructuring Loss from continuing operations $(109) $(387) $(321) costs include plant shutdown costs, severance, start-
Slide 22: Revenue and Operating Profit Reconciliation
Revenue and Operating Profit Reconciliation REVENUE RECONCILIATION COMMENTARY ($M | FYE 12/31) 2016 2017 2018 a) Cost to achieve operational initiatives include transformation efforts and restructuring. Restructuring costs GAAP Net Revenue $3,858 $3,879 $4,286 include plant shutdown costs, severance