Filing identity and reporting period
Important identity mismatch: Although the request identifies Vertiv Holdings Co, the supplied Form 10-Q is for GS Acquisition Holdings Corp, a blank-check company, for the quarter ended March 31, 2019. It contains no Vertiv operating results; confirm the filing before relying on this summary.
Business context and financial results
GS Acquisition Holdings Corp was formed to pursue an initial business combination and had not begun operating-business activities. Its reported income was primarily investment income on funds held in trust; it reported no revenue.
| Metric | Q1 2019 | Q1 2018 |
|---|---|---|
| Revenue | $0 | $0 |
| Dividend income | $3.860 million | $0 |
| General and administrative expense | $449,000 | $788 |
| Net income (loss) | $2.695 million | $(596) |
| Basic and diluted EPS, Class A and Class B | $0.03 | Class B: $(0.00); Class A: no shares reported |
| Cash provided by operating activities | $3.479 million | $0 |
Margins are not meaningful for this pre-combination shell company. At March 31, 2019, reported assets were $700.878 million, including $698.565 million in trust-account cash and cash equivalents and $1.343 million in accrued trust dividends. Cash outside the trust was $633,000. Current liabilities were $2.122 million; total liabilities were $26.272 million, including $24.150 million of deferred underwriting compensation. The company reported no long-term debt. Management reported a $291,000 working-capital deficit, assuming income and franchise tax liabilities are paid from the trust.
Changes, outlook, and risks
- Net income increased from a small loss in Q1 2018, chiefly because the trust generated dividend income in Q1 2019.
- The company was reviewing acquisition opportunities but said it could not determine whether it would complete a business combination with any target. No earnings or revenue guidance was provided.
- A sponsor affiliate committed to provide up to $2.0 million of liquidity for ordinary-course expenses through June 12, 2020, if needed. Management said it did not expect to need additional funds for pre-combination operations, but warned estimates of search and transaction costs could prove insufficient. Additional sponsor-related loans were possible but not committed.
- The company had to complete a business combination within 24 months of the June 12, 2018 offering or redeem public shares and liquidate, subject to the filing’s terms. Public-share redemptions and the ability to obtain additional financing could affect transaction funding. Deferred underwriting compensation is payable only if a combination is completed, and trust assets could be subject to creditor claims.
- The company reported no material market or interest-rate risk, no off-balance-sheet arrangements, no legal proceedings, and no material changes to previously disclosed risk factors. Management concluded disclosure controls were effective.
Key facts to verify
- Whether this GS Acquisition Holdings Corp filing is the intended document; it is not a Vertiv filing.
- Share-classification disclosures: the filing reports 66,012,711 Class A shares subject to possible redemption in one place, but other disclosures describe 2,987,289 shares as subject to possible redemption. Confirm the correct figure.
- Trust-account balances and composition: the balance sheet reports trust cash and accrued dividends separately, while MD&A also refers to $690 million held in the trust.
- The status and terms of any prospective business combination, redemption requirements, and availability of the sponsor’s committed liquidity.