Business context and reporting period
Entity mismatch: The supplied filing is GS Acquisition Holdings Corp.’s Form 10-Q, not a Vertiv Holdings Co filing. It covers the quarter and nine months ended September 30, 2018. GS Acquisition was a blank-check company formed to pursue a business combination; it had no operating revenue and was evaluating potential targets. Its IPO closed June 12, 2018.
Financial highlights
- Revenue: $0 for both the three and nine months ended September 30, 2018.
- Income: Net income was $2.30 million for the quarter and $2.68 million for the nine-month period, arising from dividend income, partly offset by general and administrative expenses and income taxes. Basic and diluted earnings per share were $0.03 for each period.
- Cash flow: Nine-month operating cash outflow was $561,009; investing cash outflow was $690.0 million, reflecting funding of the trust account; financing cash inflow was $691.55 million. Ending cash outside the trust account was $984,923.
- Liquidity: Current liabilities were $1.45 million and working capital deficit was $466,504. The balance sheet reported $692.70 million in trust-account cash equivalents and $1.07 million in accrued dividends receivable; total assets were $695.16 million.
- Debt and obligations: No long-term debt was reported. A $24.15 million deferred underwriting fee is payable only if a business combination is completed. The company also agreed to pay a sponsor affiliate $10,000 per month for administrative support until a combination or liquidation.
- Margins: Not meaningful for this non-operating blank-check company.
Changes versus the prior comparable period
For the 2017 quarter and nine-month period, the company reported no revenue and no income. The 2018 results reflect the June IPO and subsequent dividend income from trust-account investments; operations remained limited to seeking and evaluating acquisition targets. The filing does not provide a like-for-like operating-company comparison.
Outlook, risks, and unusual items
- Management said it had reviewed and continued to review business-combination opportunities but could not determine whether it would complete a transaction. No earnings or operating guidance was provided.
- The company had 24 months from the IPO closing to complete a business combination. If unsuccessful, it must cease operations and redeem public shares, subject to applicable requirements.
- Management said it did not expect to need additional funds for current operating expenditures, but warned that higher-than-estimated search and transaction costs could leave it short of cash. Additional financing might be needed to complete a transaction or address substantial share redemptions.
- Public shareholders could redeem shares in connection with a transaction. At September 30, 2018, 66,095,174 Class A shares were classified outside permanent equity at a redemption value of $664.56 million.
- The company reported no material market or interest-rate risk, no legal proceedings, and no material changes to the risk factors in its IPO prospectus. It stated that disclosure controls were effective.
Important facts to verify
- Confirm the intended issuer: this filing identifies GS Acquisition Holdings Corp., not Vertiv Holdings Co.
- Review the trust-account balance and composition: the balance sheet reports $692.70 million in cash equivalents plus $1.07 million in accrued dividends, while the MD&A also describes $690.0 million held in the money-market fund.
- Verify the business-combination deadline, redemption terms, and the conditions for payment of the $24.15 million deferred underwriting fee.
- Assess available cash outside the trust account against ongoing transaction-search costs and potential financing needs.