Business context and reporting period
This is GS Acquisition Holdings Corp II’s unaudited Form 10-Q for the quarter and six months ended June 30, 2021—not an operating-company 10-Q for Mirion Technologies. GS Acquisition was a SPAC with no operating revenue, formed to pursue a business combination. On June 17, 2021, it agreed to combine with Mirion Technologies (TopCo), Ltd.; the transaction had not closed by the reporting date.
Financial results and liquidity
- Revenue: No operating revenue. Second-quarter dividend income was $11,399; six-month dividend income was $22,672.
- Net result: Second-quarter net loss was $8.67 million, versus a $46,399 loss in Q2 2020. Six-month net income was $1.01 million, versus a $46,399 loss in the first half of 2020. Six-month results included an $9.23 million noncash gain from the decrease in warrant-liability fair value and $8.76 million of general and administrative expenses, primarily related to the proposed combination.
- Cash flow: Six-month operating cash use was $1.19 million; financing provided $1.63 million, including a $2.0 million sponsor working-capital loan. Cash and restricted cash totaled $750.89 million at June 30, most of which was held in the trust account.
- Liquidity: Cash outside the trust account was $799,624. Current assets were $1.25 million and current liabilities were $72.80 million, producing a reported working-capital deficit of $71.56 million.
- Liabilities and equity: Total liabilities were $99.05 million, including $62.44 million of warrant liabilities and a $26.25 million deferred underwriting discount payable only if a business combination closes. The company reported no long-term debt; the $2.0 million working-capital note was non-interest-bearing and unsecured. All 75 million public Class A shares were classified as redeemable temporary equity.
Material changes versus the prior comparable period
- Q2 general and administrative expenses rose to $8.09 million from $58,661 in Q2 2020, principally reflecting costs related to the proposed business combination.
- The warrant liability decreased from $71.68 million at December 31, 2020 to $62.44 million at June 30, 2021; the resulting $9.23 million six-month fair-value gain materially affected reported earnings.
- Accounts payable increased to $8.36 million from $965,370 at year-end. The company borrowed the full $2.0 million available under its sponsor working-capital note.
Transaction, outlook, and risks
- The proposed transaction contemplated $1.70 billion of total consideration, including $1.31 billion in cash, subject to transaction terms and available closing cash. The company also reported PIPE subscriptions for 90 million shares for $900 million, and a sponsor-affiliate backstop commitment of up to $125 million to support redemptions and the minimum-cash requirement.
- Closing conditions included stockholder approval, regulatory approvals, an effective registration statement, and at least $1.31 billion of cash available at closing, subject to the agreement’s waiver provisions. No operating guidance or Mirion performance outlook is provided in this filing.
- On August 12, 2021, after quarter-end, the sponsor agreed to cover certain company expenses if the transaction failed to close by July 2, 2022 or the agreement was earlier terminated, capped at $15 million. No amounts had been paid as of August 13, 2021.
- Management said disclosure controls were not effective due to a material weakness in accounting for complex features of Class A shares and warrants. The weakness had led to prior-period restatements and could result in material misstatement; no remediation progress was reported for the quarter.
- Other risks include transaction approval and completion, public-share redemptions, the cash condition, and limited funds outside the trust. The company stated there were no material changes to previously disclosed risk factors and no legal proceedings.
Important facts for investors to verify
- Confirm the transaction’s eventual completion, final consideration, financing, redemption levels, and resulting ownership and dilution.
- Review the final closing cash calculation against the $1.31 billion minimum-cash condition and any permitted waiver or backstop funding.
- Assess the warrant-liability valuation and the material weakness, including whether controls were remediated after this filing.
- Distinguish trust-account funds available only under transaction terms from the $799,624 of cash held outside the trust.