Business context and reporting period
Issuer mismatch: The supplied filing is a Form 10-Q for GS Acquisition Holdings Corp, not Vertiv Holdings Co. It covers the quarter ended June 30, 2018, and was filed August 7, 2018. GS Acquisition was a shell company formed to pursue a business combination; it completed its IPO on June 12, 2018 and had not begun operating a business.
Financial results and liquidity
- Revenue: $0 for the three and six months ended June 30, 2018.
- Net income: $386,382 for the quarter and $385,786 for the six-month period, principally from $613,686 of dividend income, offset by general and administrative costs and income taxes. Reported earnings per share rounded to $0.00.
- Cash and trust funds: $1.81 million of cash outside the trust account and $690.0 million in the trust account at June 30. The trust balance, including accrued dividends, was $690.61 million and was generally restricted pending a business combination or liquidation.
- Liquidity: Working capital surplus was $887,875. Management said it did not expect to need additional funds for operating expenditures, but noted that costs could exceed estimates and additional financing might be needed to complete a combination or meet redemptions.
- Debt and obligations: No long-term debt or off-balance-sheet arrangements were reported. Current liabilities were $923,278; deferred underwriting compensation was $24.15 million, payable if a business combination is completed.
- Cash flow: Six-month operating cash flow was positive $26,058; investing cash flow was negative $690.0 million as funds were placed in the trust; financing cash flow was positive $691.79 million, primarily from the IPO and private warrant sale.
Changes versus the prior comparable period
For the six months ended June 30, 2017, the company reported no revenue or net income; 2018 results reflect the June IPO and trust-account dividend income. The company reported no operating business revenue in either 2018 period. The 2017 comparative statements show no corresponding IPO proceeds or trust balance.
Outlook, risks and unusual items
- The company intended to complete an initial business combination within 24 months of the IPO closing; otherwise, it generally must redeem public shares and liquidate, subject to applicable requirements.
- There was no operating or earnings guidance. Management cautioned that a successful business combination was not assured and that estimated search, diligence, and transaction costs could prove insufficient.
- Public shareholders could redeem shares in connection with a combination, subject to a minimum net tangible asset requirement of $5,000,001. At June 30, 66,176,298 of 69,000,000 public Class A shares were classified outside permanent equity as redeemable.
- The company reported no material market or interest-rate exposure, no legal proceedings, and no material changes to the risk factors in its IPO prospectus. Management said disclosure controls were effective and reported no material control changes.
- Related-party items included $15.8 million of private placement warrant proceeds from the sponsor, $10,000 monthly administrative fees payable to a sponsor affiliate, and a repaid $300,000 sponsor note. The deferred underwriting fee was contingent on completing a business combination.
Investor facts to verify
- Confirm the intended issuer: this filing is for GS Acquisition Holdings Corp, not Vertiv Holdings Co.
- Verify the trust-account restrictions, redemption terms, and 24-month business-combination deadline.
- Assess available cash outside the trust against ongoing search and reporting costs, and potential need for additional financing.
- Review sponsor-related arrangements, warrant dilution potential, and the contingent $24.15 million underwriting fee.