Global data centre product and services provider Vertiv will become a publicly traded company in 2020 through a merger with GS Acquisition Holdings, with plans to make former Honeywell CEO David Cote the company’s new executive chairman. Cote is also the leader of GS Acquisition Holdings.
“This transaction enables us to accelerate our growth and innovation strategy and broaden our opportunities as we continue to focus on the ever-evolving needs of our customers,” said Vertiv CEO Rob Johnson in a statement. “Our partnership with David, who has a proven track record of driving operational improvements and shareholder value, will further enhance our trajectory as we look to capitalize on our strong foundation in a growing industry.”
Private equity firm Platinum Equity has agreed to sell a portion of its stake in Vertiv to GS Acquisition Holdings. The deal is valued at US$5.3 billion and is expected to close in the first quarter of 2020, at which point Vertiv will start trading on the New York Stock Exchange under the ticker symbol VRT.
Johnson, who will continue to lead Vertiv as CEO after closure, could not be reached by press time.
The company is one of the leading products and services provider of data centre infrastructure in the world with nearly 20,000 employees worldwide and operations in more than 130 counties. Vertiv sells a slew of hardware, software, analytics and services—including power backups, racks and enclosures, and centralised management software.
Cote said Vertiv has done a “tremendous job” over the past several years in positioning itself for long-term success.
“The company is exactly the asset we were looking for, with a great position in a good industry, products differentiated by technology, strong organic and inorganic growth potential and opportunities for sustained improvements over time,” Cote, who led Honeywell as CEO from 2002 to 2017.
Vertiv has 19 manufacturing locations and more than 2,700 service field engineers with regional hubs in China, India, the UK and the Philippines. The data centre company generated US$4.3 billion in total revenue in its fiscal year 2018.
Vertiv recently has seen traction in sales by hyperscale data centre operators such as Facebook, Google and Microsoft, which are spending billions on building, updating and equipping large data centres. In the third quarter of 2019, global hyperscale operators spent more than US$31 billion, up 8 percent year over year, on data centre Capex.
GS Acquisition Holdings held an IPO in June 2018, which raised US$690 million. The company was formed to pursue mergers, stock purchases or combinations with one or more companies.
GS Acquisition Holdings is co-sponsored by Cote and an unnamed affiliate of The Goldman Sachs Group. The company currently has a market cap of $782 million with shares at $10.49 as of Wednesday morning.
Upon closing, the public company’s name will be changed to Vertiv Holdings Co. and have a value of approximately US$5.3 billion, according to the company. The transaction was unanimously approved by both boards of directors.
When Vertiv Holdings Co. is created, Platinum Equity will hold 38 percent of shares, while Cote and affiliates of The Goldman Sachs Group will own 5 percent.