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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

 

 

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  Preliminary Proxy Statement
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  Definitive Proxy Statement
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  Soliciting Material under §240.14a-12

GS ACQUISITION HOLDINGS CORP

(Name of Registrant as Specified In Its Charter)

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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GS ACQUISITION HOLDINGS CORP

200 West Street

New York, NY 10282

Dear GS Acquisition Holdings Corp Stockholder:

We cordially invite you to attend a special meeting (the “Special Meeting”) of the stockholders of GS Acquisition Holdings Corp, a Delaware corporation (“we,” “us,” “our” or the “Company”), which will be held on February 6, 2020 at 11:00 a.m. Pacific Time at the offices of Goldman Sachs & Co. LLC, located at Fox Plaza, 2121 Avenue of the Stars, Suite 2600, Los Angeles, CA 90067 or at such other time, on such other date and at such other place to which the meeting may be adjourned or postponed.

On December 10, 2019, the Company, Vertiv Holdings, LLC, a Delaware limited liability company (“Vertiv Holdings”), VPE Holdings, LLC, a Delaware limited liability company (the “Vertiv Stockholder”), Crew Merger Sub I LLC, a Delaware limited liability company and a direct, wholly-owned subsidiary of the Company (“First Merger Sub”) and Crew Merger Sub II LLC, a Delaware limited liability company and a direct, wholly-owned subsidiary of the Company (“Second Merger Sub”) entered into an Agreement and Plan of Merger (as it may be further amended from time to time, the “Merger Agreement”), a copy of which is attached to the accompanying proxy statement as Annex A. The Merger Agreement provides for, among other things, (1) the merger of First Merger Sub with and into Vertiv Holdings, with Vertiv Holdings continuing as the surviving entity (the “First Merger”) and (2) immediately following the First Merger and as part of the same overall transaction as the First Merger, the merger of Vertiv Holdings with and into Second Merger Sub with Second Merger Sub continuing as the surviving entity, which will be renamed “Vertiv Holdings, LLC” (the “Second Merger” and, together with the First Merger, the “Mergers” and, collectively with the other transactions contemplated by the Merger Agreement, the “Business Combination”), in each case, in accordance with the terms and subject to the conditions of the Merger Agreement as more fully described elsewhere in the accompanying proxy statement. Following the closing of the Business Combination, (a) the Company will own all the equity interests of Vertiv Holdings and (b) the Vertiv Stockholder, the sole equity owner of Vertiv Holdings prior to the Business Combination, will hold a portion of the Company’s Class A common stock.

At the Special Meeting, our stockholders will be asked to consider and vote upon a proposal (the “Business Combination Proposal”) to approve and adopt the Merger Agreement and approve the Business Combination.

In accordance with the terms and subject to the conditions of the Merger Agreement, the aggregate merger consideration payable by us in connection with the Business Combination is expected to be approximately equal to the sum of (A) $5.095 billion (the “Merger Consideration”), which amount will be (1) increased by the amount of cash held by Vertiv Holdings and its subsidiaries as of 12:01 a.m., local time in each applicable jurisdiction, on the date of the closing of the Business Combination; (2) decreased by the amount of Vertiv Holdings’ outstanding indebtedness as of 12:01 a.m., local time in each applicable jurisdiction, on the date of the closing of the Business Combination; (3) decreased by the aggregate amount of certain transaction expenses incurred by Vertiv Holdings or its subsidiaries to the extent unpaid as of the date of the closing of the Business Combination; and (4) decreased by the amount equal to the lesser of (x) an amount equal to 50% of the cost of any representation and warranty insurance policy bound and issued in connection with the Business Combination and (y) $2.5 million plus (B) payments made pursuant to the Tax Receivable Agreement (as described below) in respect of the cash tax savings realized (or deemed realized) in periods after the closing of the Business Combination as a result of certain pre-existing tax assets and attributes of Vertiv.

The Merger Consideration will be paid in a combination of cash and stock. The amount of cash consideration payable to the Vertiv Stockholder at the closing of the Business Combination (the “Cash Consideration”) is $415.0 million, subject to adjustment as described below. The remainder of the consideration paid to the Vertiv Stockholder at the closing of the Business Combination will be stock consideration (the “Stock Consideration”), consisting of approximately 127.5 million newly-issued shares of our Class A common stock, subject to adjustment as described below, which shares will be valued at $10.00 per share for purposes of

 

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determining the aggregate number of shares of our Class A common stock payable to the Vertiv Stockholder as part of the Merger Consideration. In addition, the Vertiv Stockholder may be entitled to receive additional merger consideration in the form of amounts payable under a tax receivable agreement to be entered into at the closing of the Business Combination, substantially in the form attached as Annex F to the accompanying proxy statement (the “Tax Receivable Agreement”). The number of shares of our Class A common stock issued to the Vertiv Stockholder as Stock Consideration is subject to adjustment, depending on, among other things, the level of redemptions of shares of Class A common stock by our public stockholders.

Concurrently with the execution of the Merger Agreement, we entered into subscription agreements with certain investors (collectively, the “PIPE Investors”) and certain executive officers of the post-business combination company (collectively, the Subscribing Vertiv Executives) pursuant to which the PIPE Investors and the Subscribing Vertiv Executives have collectively subscribed for 123,900,000 shares of our Class A common stock for an aggregate purchase price equal to $1,239,000,000 (the “PIPE Investment”), a portion of which is expected to be funded by affiliates of the Sponsor (as defined below) (collectively, together with their permitted transferees, the “Sponsor Related PIPE Investors”). The PIPE Investment will be consummated substantially concurrently with the closing of the Business Combination. Each of the holders of our Class B common stock has agreed to waive the anti-dilution adjustments provided for in the GSAH Certificate of Incorporation applicable to our Class B common stock in connection with the Business Combination, including the PIPE Investment. As a result of such waiver, the 17,250,000 shares of our Class B common stock will automatically convert into shares of Class A common stock on a one-for-one basis upon the consummation of the Business Combination.

At the closing of the Business Combination, we will enter into the Tax Receivable Agreement, substantially in the form attached as Annex F to the accompanying proxy statement, with the Vertiv Stockholder. The Tax Receivable Agreement will generally provide for the payment by us to the Vertiv Stockholder of 65% of the cash tax savings realized (or deemed realized) in periods after the closing of the Business Combination as a result of certain pre-existing tax assets and attributes of Vertiv. We expect to retain the benefit of the remaining 35% of these cash tax savings. For additional information, see “Proposal No. 1—Approval of the Business Combination—Related Agreements—Tax Receivable Agreement” in the accompanying proxy statement.

In connection with the Business Combination, certain other related agreements have been, or will be entered into on or prior to the date the Business Combination is consummated including the Amended and Restated Registration Rights Agreement, the Stockholders Agreement, the Tax Receivable Agreement, the Escrow Agreement and the Subscription Agreements, in each case, as defined in the accompanying proxy statement. For additional information, see “Proposal No. 1—Approval of the Business Combination—Related Agreements” in the accompanying proxy statement.

In addition, at the Special Meeting, our stockholders will be asked to consider and vote upon: (1) a proposal to approve, for purposes of complying with applicable listing rules of the New York Stock Exchange (the “NYSE”), the issuance of more than 20% of the Company’s outstanding common stock in connection with the Business Combination, including up to 23,000,000 shares of our Class A common stock to the Sponsor Related PIPE Investors and up to 449,098 shares of our Class A common stock to the Subscribing Vertiv Executives (the “NYSE Proposal”); (2) six separate proposals relating to adopting the Second Amended and Restated Certificate of Incorporation in the form attached as Annex C to the accompanying proxy statement, which, if approved, would take effect upon the closing of the Business Combination (collectively, the “Charter Proposals”); (3) if you are a holder of our Class B common stock, par value $0.0001 per share (“Class B common stock”), a proposal to elect nine directors to serve, effective upon the closing of the Business Combination, on our Board of Directors until the 2021 annual meeting of stockholders, and until their respective successors are duly elected and qualified, or until their earlier resignation, removal or death (the “Director Election Proposal”); (4) a proposal to approve the Vertiv Holdings Co 2020 Equity Incentive Plan, attached as Annex G to the accompanying proxy statement (the “Incentive Plan”), including the authorization of the initial share reserve under the Incentive Plan (the “Incentive Plan Proposal” and, collectively with the Business Combination Proposal, the NYSE Proposal,

 

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each of the Charter Proposals and the Director Election Proposal, the “Condition Precedent Proposals”); and (5) a proposal to adjourn the Special Meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event there are insufficient votes for, or for any other reason in connection with, the approval of one or more of the other proposals at the Special Meeting (the “Adjournment Proposal”). Each of the Condition Precedent Proposals is cross-conditioned on the approval of each other. Each of these proposals is more fully described in the accompanying proxy statement, which each stockholder is encouraged to read carefully and in its entirety.

Our publicly-traded Class A common stock, units and warrants are currently listed on the NYSE under the symbols “GSAH,” “GSAH.U” and “GSAH WS,” respectively. We intend to apply to continue the listing of our Class A common stock, units and warrants on the NYSE under the symbols “VRT,” “VRT.U” and “VRT WS,” respectively, upon the closing of the Business Combination, though such securities may not be listed, for instance if there is not a sufficient number of round lot holders.

Pursuant to our Amended and Restated Certificate of Incorporation (the “GSAH Certificate of Incorporation”), a holder of our public shares (a “public stockholder”) may request that we redeem all or a portion of such stockholder’s public shares for cash if the Business Combination is consummated. Holders of units must elect to separate the units into the underlying public shares and warrants prior to exercising redemption rights with respect to the public shares. If holders hold their units through a broker, bank or other nominee, holders must notify their broker, bank or other nominee that they elect to separate the units into the underlying public shares and warrants, or if a holder holds units registered in its own name, the holder must contact Computershare Trust Company, N.A., our transfer agent, directly and instruct it to do so. Public stockholders may elect to redeem their public shares even if they vote “for” the Business Combination Proposal or any other proposal. If the Business Combination is not consummated, the public shares will be returned to the respective holder, broker, bank or other nominee. If the Business Combination is consummated, and if a public stockholder properly exercises its right to redeem all or a portion of the public shares that it holds, including by timely delivering its shares to our transfer agent, we will redeem such public shares for a per-share price, payable in cash, equal to the pro rata portion of the trust account established at the consummation of our initial public offering (the “trust account”), calculated as of two business days prior to the consummation of the Business Combination, including interest (net of taxes payable). For illustrative purposes, as of January 15, 2020, this would have amounted to approximately $10.25 per outstanding public share. If a public stockholder properly exercises its redemption rights in full, then it will be electing to exchange all of its public shares for cash and will not own any public shares of the post-business combination company. See “Special Meeting of GSAH Stockholders—Redemption Rights” in the accompanying proxy statement for a detailed description of the procedures to be followed if you wish to redeem your public shares for cash. Holders of our outstanding warrants do not have redemption rights in connection with the Business Combination. Unless otherwise specified, the information in the accompanying proxy statement assumes that none of our public stockholders exercise their redemption rights with respect to their shares of Class A common stock.

Notwithstanding the foregoing, a public stockholder, together with any affiliate of such public stockholder or any other person with whom such public stockholder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its public shares with respect to more than an aggregate of 15% of the public shares. Accordingly, if a public stockholder, alone or acting in concert or as a group, seeks to redeem more than 15% of the public shares, then any such shares in excess of that 15% limit would not be redeemed for cash. In addition, pursuant to the GSAH Certificate of Incorporation, in no event will we redeem public shares in an amount that would cause our net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) to be less than $5,000,001. In such case, we would not proceed with the redemption of our public shares and the Business Combination, and instead may search for an alternate initial business combination.

The Merger Agreement is also subject to the satisfaction or waiver of certain closing conditions as described in the accompanying proxy statement. These conditions to closing in the Merger Agreement are for the sole

 

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benefit of the parties thereto and may be waived by such parties. There can be no assurance that the parties to the Merger Agreement would waive any such provision of the Merger Agreement.

GS DC Sponsor I LLC (the “Sponsor”) and each of our officer and directors have agreed to, among other things, vote in favor of the Business Combination Proposal and the other proposals to be voted upon at the Special Meeting, and to waive their redemption rights in connection with the consummation of the Business Combination with respect to any shares of our common stock held by them. Our shares of Class B common stock will be excluded from the pro rata calculation used to determine the per-share redemption price. As of the date of the accompanying proxy statement, the Sponsor and the other holders of our Class B common stock own an aggregate of 20% of our outstanding shares of common stock.

We are providing the accompanying proxy statement and accompanying proxy card to our stockholders in connection with the solicitation of proxies to be voted at the Special Meeting and at any adjournments or postponements of the Special Meeting. Information about the Special Meeting, the Business Combination and other related business to be considered by the Company’s stockholders at the Special Meeting is included in the accompanying proxy statement. Whether or not you plan to attend the Special Meeting, all of our stockholders are urged to read the accompanying proxy statement, including the Annexes and the accompanying financial statements of the Company and Vertiv Holdings, LLC, carefully and in its entirety. In particular, you should also carefully consider the risk factors described in “Risk Factors” beginning on page 70 of the accompanying proxy statement.

After careful consideration, our Board of Directors has unanimously approved the Merger Agreement and the Business Combination, and unanimously recommends that our stockholders vote “FOR” adoption of the Merger Agreement and approval of the Business Combination, and “FOR” all other proposals presented to our stockholders in the accompanying proxy statement. When you consider our Board of Directors’ recommendation of these proposals, you should keep in mind that our directors have interests in the Business Combination that may conflict with your interests as a stockholder. See the section entitled “Certain Relationships and Related Persons Transactions” for additional information.

The approval of each of the Business Combination Proposal, the NYSE Proposal, the Incentive Plan Proposal and the Adjournment Proposal require the affirmative vote of a majority of the votes cast by holders of our outstanding shares of common stock represented in person or by proxy and entitled to vote thereon at the Special Meeting. The approval of each of the Charter Proposals requires the affirmative vote of holders of a majority of our outstanding shares of common stock entitled to vote thereon at the Special Meeting. Directors are elected by a plurality of the votes of our Class B common stock cast in the Director Election Proposal; this means that the nine individuals nominated for election to our Board of Directors who receive the most “FOR” votes (among the shares of our Class B common stock represented in person or by proxy and entitled to vote thereon at the Special Meeting) will be elected.

Your vote is very important. Whether or not you plan to attend the Special Meeting, please vote as soon as possible by following the instructions in the accompanying proxy statement to make sure that your shares are represented at the Special Meeting. If you hold your shares in “street name” through a broker, bank or other nominee, you will need to follow the instructions provided to you by your broker, bank or other nominee to ensure that your shares are represented and voted at the Special Meeting. The Business Combination is conditioned on the approval of each of the Condition Precedent Proposals at the Special Meeting. Each of the Condition Precedent Proposals is cross-conditioned on the approval of each other. The Adjournment Proposal is not conditioned upon the approval of any other proposal. Each of these proposals is more fully described in the accompanying proxy statement, which each stockholder is encouraged to read carefully and in its entirety.

If you sign and return your proxy card without indicating how you wish to vote, your proxy will be voted “FOR” each of the proposals presented at the Special Meeting. If you fail to return your proxy card or fail to

 

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instruct your broker, bank or other nominee how to vote, and do not attend the Special Meeting in person, the effect will be, among other things, that your shares will not be counted for purposes of determining whether a quorum is present at the Special Meeting and will not be voted. An abstention will be counted towards the quorum requirement for each of the proposals presented at the Special Meeting but a broker non-vote will not. In connection with (i) the Business Combination Proposal and the Adjournment Proposal, abstentions and broker non-votes will have no effect, (ii) the NYSE Proposal and the Incentive Plan Proposal, abstentions will be counted as a vote cast at the Special Meeting and will have the same effect as a vote “AGAINST” the proposal but broker non-votes will have no effect and (iii) the Charter Proposal, abstentions and broker non-votes will have the same effect as voting “AGAINST” the proposal. If you are a stockholder of record and you attend the Special Meeting and wish to vote in person, you may withdraw your proxy and vote in person.

TO EXERCISE YOUR REDEMPTION RIGHTS, YOU MUST DEMAND IN WRITING THAT YOUR PUBLIC SHARES ARE REDEEMED FOR A PRO RATA PORTION OF THE FUNDS HELD IN THE TRUST ACCOUNT AND TENDER YOUR SHARES TO OUR TRANSFER AGENT AT LEAST TWO BUSINESS DAYS BEFORE THE SCHEDULED DATE OF THE SPECIAL MEETING. YOU MAY TENDER YOUR SHARES BY EITHER DELIVERING YOUR STOCK CERTIFICATE TO THE TRANSFER AGENT OR BY DELIVERING YOUR SHARES ELECTRONICALLY USING THE DEPOSITORY TRUST COMPANY’S DWAC (DEPOSIT WITHDRAWAL AT CUSTODIAN) SYSTEM. IF THE BUSINESS COMBINATION IS NOT COMPLETED, THEN THESE SHARES WILL BE RETURNED TO YOU OR YOUR ACCOUNT. IF YOU HOLD THE SHARES IN STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BROKER, BANK OR OTHER NOMINEE TO WITHDRAW THE SHARES FROM YOUR ACCOUNT IN ORDER TO EXERCISE YOUR REDEMPTION RIGHTS.

On behalf of our Board of Directors, I would like to thank you for your support and look forward to the successful completion of the Business Combination.

 

Sincerely,
/s/ David M. Cote
David M. Cote
Chief Executive Officer, President and Secretary, and Chairman of the Board of Directors

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES REGULATORY AGENCY HAS APPROVED OR DISAPPROVED THE TRANSACTIONS DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT, PASSED UPON THE MERITS OR FAIRNESS OF THE BUSINESS COMBINATION OR RELATED TRANSACTIONS OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE DISCLOSURE IN THE ACCOMPANYING PROXY STATEMENT. ANY REPRESENTATION TO THE CONTRARY CONSTITUTES A CRIMINAL OFFENSE.

The accompanying proxy statement is dated January 17, 2020 and is expected to be first mailed to our stockholders on or about January 17, 2020.

 

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NOTICE OF SPECIAL MEETING OF

STOCKHOLDERS OF GS ACQUISITION HOLDINGS CORP

TO BE HELD FEBRUARY 6, 2020

To the Stockholders of GS Acquisition Holdings Corp:

NOTICE IS HEREBY GIVEN that a special meeting (the “Special Meeting”) of the stockholders of GS Acquisition Holdings Corp, a Delaware corporation (“we,” “us,” “our” or the “Company”), will be held on February 6, 2020 at 11:00 a.m. Pacific Time at the offices of Goldman Sachs & Co. LLC, located at Fox Plaza, 2121 Avenue of the Stars, Suite 2600, Los Angeles, CA 90067. You are cordially invited to attend the Special Meeting to conduct the following items of business:

 

   

Proposal No. 1—Business Combination Proposal—To consider and vote upon a proposal to approve and adopt the Agreement and Plan of Merger, dated as of December 10, 2019 (as it may be further amended from time to time, the “Merger Agreement”), by and among the Company, Crew Merger Sub I LLC, a Delaware limited liability company and a direct, wholly owned subsidiary of the Company (“First Merger Sub”), Crew Merger Sub II LLC, a Delaware limited liability company and a direct, wholly owned subsidiary of the Company (“Second Mergers Sub”), Vertiv Holdings, LLC, a Delaware limited liability company (“Vertiv Holdings”), and VPE Holdings, LLC, a Delaware limited liability company, a copy of which is attached to this proxy statement as Annex A, and approve the transactions contemplated thereby, including, among other things: (1) the merger of First Merger Sub with and into Vertiv Holdings, with Vertiv Holdings continuing as the surviving entity (the “First Merger”) and (2) immediately following the First Merger and as part of the same overall transaction as the First Merger, the merger of Vertiv Holdings with and into Second Merger Sub with Second Merger Sub continuing as the surviving entity which will be renamed “Vertiv Holdings, LLC” (the “Second Merger” and, together with the First Merger, the “Mergers” and, collectively with the other transactions contemplated by the Merger Agreement, the “Business Combination”) (we refer to this proposal as the “Business Combination Proposal”);

 

   

Proposal No. 2—NYSE Proposal—To consider and vote upon a proposal to approve, for purposes of complying with applicable listing rules of the New York Stock Exchange (the “NYSE”), the issuance of more than 20% of the Company’s outstanding common stock in connection with the Business Combination, including up to 23,000,000 shares of our Class A common stock to the Sponsor Related PIPE Investors (as defined below) and up to 449,098 shares of our Class A common stock to the Subscribing Vertiv Executives (as defined below) (we refer to this proposal as the “NYSE Proposal”);

 

   

Proposal No. 3—Charter Proposals—To consider and act upon the following six separate proposals relating to adopting the Second Amended and Restated Certificate of Incorporation in the form attached to the accompanying proxy statement as Annex C (the “New Vertiv Certificate of Incorporation”), which, if approved, would take effect upon the closing of the Business Combination (we refer to these proposals, collectively, as the “Charter Proposals”):

 

   

to (i) increase the number of authorized shares of capital stock, (ii) automatically convert each share of Class B common stock into one share of Class A common stock immediately prior to the consummation of the Business Combination, (iii) following such conversion, reduce the authorized shares of Class B common stock to zero and (iv) provide for certain conforming changes to the GSAH Certificate of Incorporation given the elimination of any authorized Class B common stock;

 

   

to provide that the number of directors of the Company will be fixed from time to time exclusively by our Board of Directors pursuant to a resolution adopted by a majority of our Board of Directors;

 

   

to provide a special exemption to the doctrine of corporate opportunity for each of Platinum Equity (as defined herein), the investment funds affiliated with or managed by Platinum Equity and the other Exempted Persons (as defined herein);

 

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to elect not to be governed by Section 203 of the DGCL (as defined herein) and, instead, be governed by a provision substantially similar to Section 203 of the DGCL, except that such provision excludes investment funds affiliated with the Sponsor (as defined herein), GS Sponsor LLC and Platinum Equity and their respective successors and affiliates;

 

   

to require the approval of at least two-thirds of the voting power of our outstanding capital stock to amend certain provisions of the New Vertiv Certificate of Incorporation; and

 

   

to provide for several changes to the New Vertiv Certificate of Incorporation, including (i) removal of certain listed actions that would allow for personal liability of the Company’s directors to the Company and its stockholders, (ii) certain provisions regarding indemnification of directors and officers, (iii) removal of various provisions in the GSAH Certificate of Incorporation applicable to blank check companies that will no longer be applicable to the Company, (iv) addition of a provision whereby no class vote is required to change the authorized number of shares of such class, (v) changing the name of the Company to “Vertiv Holdings Co” and (vi) other conforming changes from the GSAH Certificate of Incorporation based on the Charter Proposals;

 

   

Proposal No. 4—Director Election Proposal—To consider and vote upon, if you are a holder of our Class B common stock, par value $0.0001 per share (“Class B common stock”), a proposal to elect nine directors to serve, effective upon the closing of the Business Combination, on our Board of Directors until the 2021 annual meeting of stockholders, and until their respective successors are duly elected and qualified, or until their earlier resignation, removal or death (we refer to this proposal as the “Director Election Proposal”);

 

   

Proposal No. 5—Incentive Plan Proposal—To consider and vote upon a proposal to approve the Vertiv Holdings Co 2020 Equity Incentive Plan (the “Incentive Plan”), including the authorization of the initial share reserve under the Incentive Plan (we refer to this proposal as the “Incentive Plan Proposal”); and

 

   

Proposal No. 6—Adjournment Proposal—To consider and vote upon a proposal to approve the adjournment of the Special Meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or for any other reason in connection with, the approval of one or more of the other proposals at the Special Meeting (we refer to this proposal as the “Adjournment Proposal”).

The Business Combination is conditioned on the approval of each of the Condition Precedent Proposals at the Special Meeting. Each of the Condition Precedent Proposals is cross-conditioned on the approval of each other. The Adjournment Proposal is not conditioned upon the approval of any other proposal. Each of these proposals is more fully described in this proxy statement, which each stockholder is encouraged to read carefully and in its entirety.

The record date for the Special Meeting is January 16, 2020. Only stockholders of record at the close of business on that date may vote at the Special Meeting or any adjournment thereof. A complete list of our stockholders of record entitled to vote at the Special Meeting will be available for ten days before the Special Meeting at our principal executive offices for inspection by stockholders during ordinary business hours for any purpose germane to the Special Meeting.

Pursuant to our Amended and Restated Certificate of Incorporation (the “GSAH Certificate of Incorporation”), a holder of our public shares (a “public stockholder”) may request that we redeem all or a portion of such stockholder’s public shares for cash if the Business Combination is consummated. Holders of units must elect to separate the units into the underlying public shares and warrants prior to exercising redemption rights with respect to the public shares. If holders hold their units through a broker, bank or other nominee, holders must notify their broker, bank or other nominee that they elect to separate the units into the

 

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underlying public shares and warrants, or if a holder holds units registered in its own name, the holder must contact Computershare Trust Company, N.A., our transfer agent, directly and instruct it to do so. Public stockholders may elect to redeem their public shares even if they vote “for” the Business Combination Proposal or any other proposal. If the Business Combination is not consummated, the public shares will be returned to the respective holder, broker, bank or other nominee. If the Business Combination is consummated, and if a public stockholder properly exercises its right to redeem all or a portion of the public shares that it holds, including timely delivering its shares to our transfer agent, we will redeem such public shares for a per-share price, payable in cash, equal to the pro rata portion of the trust account established at the consummation of our initial public offering (the “trust account”), calculated as of two business days prior to the consummation of the Business Combination, including interest (net of taxes payable). For illustrative purposes, as of January 15, 2020, this would have amounted to approximately $10.25 per outstanding public share. If a public stockholder properly exercises its redemption rights in full, then it will be electing to exchange all of its public shares for cash and will not own any public shares of the post-business combination company. See “Special Meeting of GSAH Stockholders—Redemption Rights” in this proxy statement for a detailed description of the procedures to be followed if you wish to redeem your public shares for cash. Holders of our outstanding warrants do not have redemption rights in connection with the Business Combination. Unless otherwise specified, the information in this proxy statement assumes that none of our public stockholders exercise their redemption rights with respect to their shares of Class A common stock.

Notwithstanding the foregoing, a public stockholder, together with any affiliate of such public stockholder or any other person with whom such public stockholder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its public shares with respect to more than an aggregate of 15% of the public shares. Accordingly, if a public stockholder, alone or acting in concert or as a group, seeks to redeem more than 15% of the public shares, then any such shares in excess of that 15% limit would not be redeemed for cash. In addition, pursuant to the GSAH Certificate of Incorporation, in no event will we redeem public shares in an amount that would cause our net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) to be less than $5,000,001. In such case, we would not proceed with the redemption of our public shares and the Business Combination, and instead may search for an alternate initial business combination.

GS DC Sponsor I LLC (the “Sponsor”) and each of our officer and directors have agreed to, among other things, vote in favor of the Business Combination Proposal and the other proposals described herein to be presented at the Special Meeting, and to waive their redemption rights in connection with the consummation of the Business Combination with respect to any shares held by them. Our shares of Class B common stock will be excluded from the pro rata calculation used to determine the per-share redemption price. As of the date of this proxy statement, the Sponsor and our officer and directors own an aggregate of 20% of our outstanding shares of common stock.

Concurrently with the execution of the Merger Agreement, we entered into subscription agreements with certain investors (collectively, the “PIPE Investors”) and certain executive officers of the post-business combination company (collectively, the “Subscribing Vertiv Executives”) pursuant to which the PIPE Investors and the Subscribing Vertiv Executives have collectively subscribed for 123,900,000 shares of our Class A common stock for an aggregate purchase price equal to $1,239,000,000 (the “PIPE Investment”), a portion of which is expected to be funded by affiliates of the Sponsor (collectively, together with their permitted transferees, the “Sponsor Related PIPE Investors”). The PIPE Investment will be consummated substantially concurrently with the closing of the Business Combination. Each of the holders of our Class B common stock has agreed to waive the anti-dilution adjustments provided for in the GSAH Certificate of Incorporation applicable to our Class B common stock in connection with the Business Combination, including the PIPE Investment. As a result of such waiver, the 17,250,000 shares of our Class B common stock will automatically convert into shares of Class A common stock on a one-for-one basis upon the consummation of the Business Combination.

The approval of each of the Business Combination Proposal, the NYSE Proposal, the Incentive Plan Proposal and the Adjournment Proposal require the affirmative vote of a majority of the votes cast by holders of

 

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our outstanding shares of common stock represented in person or by proxy and entitled to vote thereon at the Special Meeting. The approval of each of the Charter Proposals requires the affirmative vote of holders of a majority of our outstanding shares of common stock entitled to vote thereon at the Special Meeting. Directors are elected by a plurality of the votes of our Class B common stock cast in the Director Election Proposal; this means that the nine individuals nominated for election to our Board of Directors who receive the most “FOR” votes (among the shares of our Class B common stock represented in person or by proxy and entitled to vote thereon at the Special Meeting) will be elected.

Your vote is very important. Whether or not you plan to attend the Special Meeting, please vote as soon as possible by following the instructions in this proxy statement to make sure that your shares are represented at the Special Meeting. If you hold your shares in “street name” through a broker, bank or other nominee, you will need to follow the instructions provided to you by your broker, bank or other nominee to ensure that your shares are represented and voted at the Special Meeting. The Business Combination is conditioned on the approval of each of the Condition Precedent Proposals at the Special Meeting. Each of the Condition Precedent Proposals is cross-conditioned on the approval of each other. The Adjournment Proposal is not conditioned upon the approval of any other proposal. Each of these proposals is more fully described in this proxy statement, which each stockholder is encouraged to read carefully and in its entirety.

If you sign and return your proxy card without indicating how you wish to vote, your proxy will be voted “FOR” each of the proposals presented at the Special Meeting. If you fail to return your proxy card or fail to instruct your broker, bank or other nominee how to vote, and do not attend the Special Meeting in person, the effect will be, among other things, that your shares will not be counted for purposes of determining whether a quorum is present at the Special Meeting and will not be voted. An abstention will be counted towards the quorum requirement for each of the proposals presented at the Special Meeting but a broker non-vote will not. In connection with (i) the Business Combination Proposal and the Adjournment Proposal, abstentions and broker non-votes will have no effect, (ii) the NYSE Proposal and the Incentive Plan Proposal, abstentions will be counted as a vote cast at the Special Meeting and will have the same effect as a vote “AGAINST” the proposal but broker non-votes will have no effect and (iii) the Charter Proposal, abstentions and broker non-votes will have the same effect as voting “AGAINST” the proposal. If you are a stockholder of record and you attend the Special Meeting and wish to vote in person, you may withdraw your proxy and vote in person.

Your attention is directed to the remainder of this proxy statement following this notice (including the Annexes and other documents referred to herein) for a more complete description of the proposed Business Combination and related transactions and each of the proposals. You are encouraged to read this proxy statement carefully and in its entirety, including the Annexes and other documents referred to herein. If you have any questions or need assistance voting your shares, please contact Morrow Sodali LLC (“Morrow”), our proxy solicitor, by calling (800) 662-5200 or banks and brokers can call collect at (203) 658-9400, or by emailing GSAH.info@investor.morrowsodali.com.

 

By Order of the Board of Directors
/s/ David M. Cote
David M. Cote
Chief Executive Officer, President and Secretary, and Chairman of the Board of Directors

New York, NY

January 17, 2020

 

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TABLE OF CONTENTS

 

     Page  

MARKET, RANKING AND OTHER INDUSTRY DATA

     1  

TRADEMARKS, SERVICE MARKS AND TRADE NAMES

     1  

SELECTED DEFINITIONS

     2  

NON GAAP FINANCIAL MEASURES

     6  

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

     8  

SUMMARY TERM SHEET

     11  

QUESTIONS AND ANSWERS ABOUT THE PROPOSALS FOR OUR STOCKHOLDERS

     19  

SUMMARY OF THE PROXY STATEMENT

     35  

SELECTED HISTORICAL FINANCIAL INFORMATION OF GSAH

     59  

SELECTED CONSOLIDATED HISTORICAL FINANCIAL AND OTHER INFORMATION OF VERTIV HOLDINGS

     62  

SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

     66  

COMPARATIVE PER SHARE INFORMATION

     68  

RISK FACTORS

     70  

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

     108  

SPECIAL MEETING OF GSAH STOCKHOLDERS

     118  

PROPOSAL NO. 1—APPROVAL OF THE BUSINESS COMBINATION

     126  

PROPOSAL NO. 2—APPROVAL OF THE ISSUANCE OF MORE THAN 20% OF THE COMPANY’S OUTSTANDING COMMON STOCK IN CONNECTION WITH THE BUSINESS COMBINATION

     170  

PROPOSAL NO. 3—APPROVAL OF THE SECOND AMENDED AND RESTATED CERTIFICATE OF INCORPORATION

     173  

PROPOSAL NO. 4—ELECTION OF DIRECTORS TO THE BOARD OF DIRECTORS

     179  

PROPOSAL  NO. 5—APPROVAL OF THE INCENTIVE PLAN, INCLUDING THE AUTHORIZATION OF THE INITIAL SHARE RESERVE UNDER THE INCENTIVE PLAN

     180  

PROPOSAL NO. 6—THE ADJOURNMENT PROPOSAL

     189  

INFORMATION ABOUT GSAH

     190  

GSAH’s MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     203  

INFORMATION ABOUT VERTIV

     207  

VERTIV HOLDINGS’ MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     216  

EXECUTIVE COMPENSATION

     239  

MANAGEMENT AFTER THE BUSINESS COMBINATION

     258  

DESCRIPTION OF SECURITIES

     266  

SECURITIES ACT RESTRICTIONS ON RESALE OF SECURITIES

     269  

BENEFICIAL OWNERSHIP OF SECURITIES

     271  

CERTAIN RELATIONSHIPS AND RELATED PERSONS TRANSACTIONS

     275  

MARKET PRICE INFORMATION

     281  

APPRAISAL RIGHTS

     282  

DELIVERY OF DOCUMENTS TO STOCKHOLDERS

     282  

TRANSFER AGENT AND REGISTRAR

     282  

SUBMISSION OF STOCKHOLDER PROPOSALS

     282  

FUTURE STOCKHOLDER PROPOSALS

     282  

INDEPENDENT AUDITOR

     283  

WHERE YOU CAN FIND MORE INFORMATION

     284  

INDEX TO CONSOLIDATED FINANCIAL INFORMATION

     F-S-1  

 

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ANNEXES

  

Annex A

  

Agreement and Plan of Merger

Annex B

  

Form of New Vertiv Certificate of Incorporation

Annex C

  

Form of New Vertiv Bylaws

Annex D

  

Form of Amended and Restated Registration Rights Agreement

Annex E

  

Form of Stockholders Agreement

Annex F

  

Form of Tax Receivable Agreement

Annex G

  

Form of Equity Incentive Plan

Annex H

  

Form of Participation Plan Release

Annex I

  

Form of Escrow Agreement

 

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MARKET, RANKING AND OTHER INDUSTRY DATA

Certain market, ranking and industry data included in this proxy statement, including the size of certain markets and Vertiv’s (as defined below) size or position and the positions of Vertiv’s competitors within these markets, including its products and services relative to its competitors, are based on estimates of Vertiv’s management. These estimates have been derived from Vertiv’s management’s knowledge and experience in the markets in which Vertiv operates, as well as information obtained from surveys, reports by market research firms, Vertiv’s customers, distributors, suppliers, trade and business organizations and other contacts in the markets in which Vertiv operates, which, in each case, we and Vertiv believe are reliable.

We are responsible for all of the disclosure in this proxy statement and while we believe the data from these sources to be accurate and complete, neither we nor Vertiv have independently verified data from these sources or obtained third-party verification of market share data and this information may not be reliable. In addition, these sources may use different definitions of the relevant markets. Data regarding Vertiv’s industry is intended to provide general guidance, but is inherently imprecise. Market share data is subject to change and cannot always be verified with certainty due to limits on the availability and reliability of raw data, the voluntary nature of the data gathering process and other limitations and uncertainties inherent in any statistical survey of market shares. In addition, customer preferences can and do change. As a result, you should be aware that market share, ranking and other similar data set forth herein, and estimates and beliefs based on such data, may not be reliable. References herein to Vertiv being a leader in a market or product category refers to Vertiv’s belief that it has a leading market share position in each specified market, unless the context otherwise requires. In addition, the discussion herein regarding Vertiv’s various markets is based on how Vertiv defines the markets for its products, which products may be either part of larger overall markets or markets that include other types of products and services.

Assumptions and estimates of Vertiv’s and Vertiv’s future performance are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described in “Risk factors—Risks Related to Vertiv’s Business.” These and other factors could cause our future performance to differ materially from our assumptions and estimates. See “Cautionary Statement Regarding Forward-Looking Statements.

TRADEMARKS, SERVICE MARKS AND TRADE NAMES

This proxy statement contains some of Vertiv’s trademarks, service marks and trade names, including, among others, Vertiv, Liebert, Chloride, NetSure, Geist, Energy Labs, Trellis, Alber, HVM and Avocent. Each one of these trademarks, service marks or trade names is either (1) Vertiv’s registered trademark, (2) a trademark for which Vertiv has a pending application, or (3) a trade name or service mark for which Vertiv claims common law rights. All other trademarks, trade names or service marks of any other company appearing in this proxy statement belong to their respective owners. Solely for convenience, the trademarks, service marks and trade names referred to in this proxy statement are presented without the TM, SM and ® symbols, but such references are not intended to indicate, in any way, that we or Vertiv will not assert, to the fullest extent under applicable law, our respective rights or the rights of the applicable licensors to these trademarks, service marks and trade names.

 

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SELECTED DEFINITIONS

Unless otherwise stated in this proxy statement or the context otherwise requires, references to:

 

   

2022 Senior Notes” are to Vertiv Holdco’s $500.0 million of 12.00%/13.00% Senior PIK Toggle Notes due 2022;

 

   

2024 Senior Notes” are to Vertiv Group’s $750.0 million of 9.250% Senior Notes due 2024;

 

   

2024 Senior Secured Notes” are to Vertiv Group’s $120.0 million of 10.00% Senior Secured Second Lien Notes due 2024 (with a springing to maturity of November 21, 2021 if the 2022 Senior Notes are not repaid, redeemed or discharged, or the maturity with respect thereto is not otherwise extended, on or prior to November 15, 2021);

 

   

Asset-Based Revolving Credit Facility” are to that certain Revolving Credit Agreement, by and among, inter alia, Vertiv Group, certain direct and indirect subsidiaries of Vertiv Group as co-borrowers thereunder, various lenders and JPMorgan Chase Bank, N.A., as administrative agent, as amended, amended and restated, modified or supplemented from time to time;

 

   

Board,” “Board of Directors,” or “GSAH Board” are to the board of directors of the Company;

 

   

Business Combination” are to the transactions contemplated by the Merger Agreement, including: (1) the merger of First Merger Sub with and into Vertiv Holdings, with Vertiv Holdings continuing as the surviving entity (the “First Merger”); (2) immediately following the First Merger and as part of the same overall transaction as the First Merger, the merger of Vertiv Holdings with and into Second Merger Sub with Second Merger Sub continuing as the surviving entity, which will be renamed “Vertiv Holdings, LLC” (the “Second Merger” and, together with the First Merger, the “Mergers”); and (3) the PIPE Investment;

 

   

Class A common stock” are to Class A common stock, par value $0.0001 per share, of the Company;

 

   

Class B common stock” are to Class B common stock, par value $0.0001 per share, of the Company;

 

   

Code” are to the Internal Revenue Code of 1986, as amended;

 

   

Common Stock” are to the Class A common stock and the Class B common stock, together;

 

   

Company,” “we,” “us,” and “our” are to GS Acquisition Holdings Corp, including, as applicable, following the consummation of the Business Combination (at which time, it will have changed its name to Vertiv Holdings Co);

 

   

DGCL” are to the General Corporation Law of the State of Delaware;

 

   

Emerson” are to Emerson Electric Co., which, prior to the Separation in the fiscal fourth quarter of 2016, operated Vertiv’s business as part of its broader corporate organization;

 

   

Exchange Act” are to the Securities Exchange Act of 1934, as amended;

 

   

Existing Notes” are to the 2022 Senior Notes, 2024 Senior Notes and 2024 Senior Secured Notes;

 

   

EY” are to Ernst & Young LLP, independent registered public accounting firm to Vertiv Holdings;

 

   

First Merger Sub” are to Crew Merger Sub I LLC, a Delaware limited liability company and a direct, wholly-owned subsidiary of GSAH;

 

   

founder shares” are to the shares of Class B common stock, of which 17,250,000 shares are outstanding as of the date of this proxy statement (17,145,000 shares of which are held by the Sponsor and 35,000 shares of which are held by each of Mr. James Albaugh, Mr. Roger Fradin and Mr. Steven S. Reinemund);

 

   

GAAP” are to the Generally Accepted Accounting Principles in the United States of America;

 

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Goldman Sachs” are to The Goldman Sachs Group, Inc., a Delaware corporation (NYSE: GS) and its affiliates (other than the Company);

 

   

GSAH” are to GS Acquisition Holdings Corp, prior to the consummation of the Business Combination;

 

   

GSAH Certificate of Incorporation” are to GSAH’s amended and restated certificate of incorporation, dated June 7, 2018;

 

   

GSAM” are to Goldman Sachs Asset Management, L.P., a division of The Goldman Sachs Group, Inc.;

 

   

GS Sponsor Capital Commitment” are to the commitment provided to GSAH from GS Sponsor LLC, an affiliate of the Sponsor, pursuant to which GS Sponsor LLC agreed that, if funds are needed by GSAH through June 12, 2020 to pay ordinary course expenses, GS Sponsor LLC will provide GSAH with liquidity of up to an aggregate of $2.0 million, for which GS Sponsor LLC will not receive any additional interest in GSAH and any such liquidity provided will be in the form of a contribution with respect to the Sponsor’s founder shares;

 

   

HSR Act” are to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended;

 

   

Incentive Plan” are to the Vertiv Holdings Co 2020 Equity Incentive Plan attached to this proxy statement as Annex G;

 

   

Initial Stockholders” are to the Sponsor and Mr. James Albaugh, Mr. Roger Fradin and Mr. Steven S. Reinemund, GSAH’s independent directors;

 

   

Investment Company Act” are to the Investment Company Act of 1940, as amended;

 

   

IPO” or “initial public offering” are to GSAH’s initial public offering, consummated on June 12, 2018;

 

   

JOBS Act” are to the Jumpstart Our Business Startups Act of 2012;

 

   

management” or “management team” of an entity are to the officers and directors of such entity;

 

   

maximum redemption scenario” are to a scenario in which, in connection with the Business Combination, the maximum number of shares of Class A common stock are redeemed such that the remaining funds held in the trust account after the payment of the redeeming shares’ pro-rata allocation along with the proceeds from the PIPE Investment are sufficient to satisfy the Minimum Required Funds Condition. Based on the amount of $705.0 million in our trust account as of September 30, 2019, including accrued dividends, and taking into account the anticipated gross proceeds of approximately $1,239.0 million from the PIPE Investment, approximately 55,400,000 shares of Class A common stock may be redeemed and still enable GSAH to have sufficient cash to satisfy the cash closing conditions in the Merger Agreement;

 

   

Merger Agreement” are to that certain Agreement and Plan of Merger, dated as of December 10, 2019 (as it may be further amended from time to time), by and among the Company, Vertiv Holdings, the Vertiv Stockholder, First Merger Sub and Second Merger Sub attached to this proxy statement as Annex A, as it may be further amended from time to time;

 

   

Minimum Required Funds Condition” are to the condition that the funds contained in the trust account after satisfying any redemptions by our public stockholders and paying the deferred underwriting discount, together with the proceeds from the PIPE Investment, shall equal or exceed $1.375 billion;

 

   

Morrow” are to Morrow Sodali, proxy solicitor to the Company;

 

   

New Vertiv Bylaws” are to the proposed Amended and Restated Bylaws of the Company, a form of which is attached hereto as Annex C, which will become the Company’s bylaws upon the consummation of the Business Combination;

 

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New Vertiv Certificate of Incorporation” are to the proposed Second Amended and Restated Certificate of Incorporation of the Company, a form of which is attached hereto as Annex B, which will become the Company’s certificate of incorporation upon the consummation of the Business Combination;

 

   

New Vertiv Organizational Documents” are to the New Vertiv Bylaws and the New Vertiv Certificate of Incorporation;

 

   

no redemption scenario” are to a scenario in which, in connection with the Business Combination, no shares of Class A common stock are redeemed;

 

   

NYSE” are to the New York Stock Exchange;

 

   

PIPE Investment” are to the private placement pursuant to which the PIPE Investors and the Subscribing Vertiv Executives have collectively subscribed for 123,900,000 shares of our Class A common stock for an aggregate purchase price equal to $1,239,000,000 (the “PIPE Investment”), a portion of which is expected to be funded by the Sponsor Related PIPE Investors;

 

   

PIPE Investors” are to the Sponsor Related PIPE Investors and certain other “accredited investors” (as defined in Rule 501 under the Securities Act) that will invest in the PIPE Investment;

 

   

Platinum” are to Platinum Equity Capital Partners III, L.P., Platinum Equity Capital Partners IV, L.P. and certain of their affiliates who beneficially own shares of our common stock;

 

   

Platinum Advisors” are to Platinum Equity Advisors, LLC, an affiliate of Platinum;

 

   

Platinum Equity” are to Platinum Equity, LLC, its sponsored funds and affiliated private equity vehicles;

 

   

post-business combination company” are to the Company following the consummation of the Business Combination;

 

   

private placement warrants” are to the 10,533,333 private placement warrants outstanding as of the date of this proxy statement;

 

   

public shares” are to the shares of Class A common stock (including those that underlie the units) that were initially offered and sold by GSAH in its IPO;

 

   

public stockholders” are to the holders of our public shares (including the Sponsor and the other holders of our Class B common stock, provided that each of their status as a “public stockholder” shall only exist with respect to such public shares);

 

   

public warrants” are to the redeemable warrants (including those that underlie the units) that were initially offered and sold by GSAH in its IPO;

 

   

redemption” are to each redemption of public shares for cash pursuant to the GSAH Certificate of Incorporation;

 

   

Sarbanes-Oxley Act” are to the Sarbanes-Oxley Act of 2002;

 

   

SEC” are to the U.S. Securities and Exchange Commission;

 

   

Second Merger Sub” are to Crew Merger Sub II LLC, a Delaware limited liability company and a direct, wholly-owned subsidiary of GSAH;

 

   

Securities Act” are to the Securities Act of 1933, as amended;

 

   

Senior Secured Credit Facilities” are to the Term Loan Facility and the Asset-Based Revolving Credit Facility, collectively;

 

   

Separation” are to the transaction described in Note 1 (The Transaction) to Vertiv Holdings, LLC’s historical consolidated and combined financial statements included elsewhere in this proxy statement, pursuant to which Vertiv Group and certain of its affiliates acquired the assets and liabilities associated with the business, operations, products, services and activities of Vertiv Predecessor;

 

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Special Meeting” are to the special meeting of the stockholders of the Company that is the subject of this proxy statement;

 

   

Sponsor” are to GS DC Sponsor I LLC, a Delaware limited liability company and an affiliate of each of Goldman Sachs and David M. Cote; provided that, following the dissolution of GS DC Sponsor I LLC or the distribution of substantially all of the assets of GS DC Sponsor I LLC to its members, “Sponsor” shall include GS Sponsor LLC and a limited liability company owned by trusts controlled by David M. Cote, the two members of GS DC Sponsor I LLC;

 

   

Sponsor Lock-up Period” are to (1) in the case of the founder shares, the period ending on the earlier of (A) one year after the completion of our initial business combination and (B) subsequent to our initial business combination, (x) if the last reported sale price of the Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination, or (y) the date following the completion of our initial business combination on which we complete a liquidation, merger, stock exchange, reorganization or other similar transaction that results in all of our public stockholders having the right to exchange their shares of Class A common stock for cash, securities or other property, and (2) in the case of the private placement warrants and the respective Class A common stock underlying such warrants, the period ending 30 days after the completion of our initial business combination;

 

   

Sponsor Related PIPE Investors” are to certain affiliates of the Sponsor, along with their permitted transferees, that will invest in the PIPE Investment. Specifically, certain affiliates of Goldman Sachs (the “GS PIPE Investors”) have subscribed for $210 million in the PIPE Investment and a limited liability company wholly-owned by David M. Cote has subscribed for an additional $20 million in the PIPE Investment. Such GS PIPE Investors have made an aggregate of $100 million of their subscription available to certain employees of Goldman Sachs and associates of David Cote, including directors of GSAH and certain persons that have been nominated to serve as directors of the post-business combination company, prior to the PIPE Investment. Separately, Goldman Sachs & Co. LLC has agreed to a forward-starting swap agreement relating to $110 million of shares of GSAH with an institutional investor. As a result of the foregoing, the GS PIPE Investors may not have an economic interest in the PIPE Investment equal to their subscription;

 

   

Stock Consideration” are to the shares of Class A common stock to be issued to the Vertiv Stockholder pursuant to the transactions contemplated by the Merger Agreement;

 

   

“Subscribing Vertiv Executives are to certain executive officers of the post-business combination company that will invest in the PIPE Investment;

 

   

Subscription Agreements” are to, collectively, those certain subscription agreements entered into between the Company and the PIPE Investors or the Subscribing Vertiv Executives, as applicable;

 

   

Tax Receivable Agreement” are to that certain Tax Receivable Agreement to be entered into at the closing of the Business Combination by the Company and the Vertiv Stockholder;

 

   

Term Loan Facility” are to that certain Term Loan Credit Agreement, by and among¸ inter alia, Vertiv Group, various lenders and JPMorgan Chase Bank, N.A., as administrative agent, as amended, amended and restated, modified or supplemented from time to time;

 

   

transfer agent” are to Computershare Trust Company, N.A. (“Computershare”);

 

   

trust account” are to the trust account of GSAH that holds proceeds from its IPO and the sale of the private placement warrants;

 

   

trustee” are to Wilmington Trust, N.A.;

 

   

units” are to the units of the Company, each unit representing one share of Class A common stock and one-third of one redeemable warrant to acquire one share of Class A common stock, that were initially offered and sold by GSAH in its IPO (less the number of units that have been separated into the underlying public shares and underlying warrants upon the request of the holder thereof);

 

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Vertiv” are to Vertiv Holdings, together with its subsidiaries, including Vertiv Holding Corporation;

 

   

Vertiv Group” are to Vertiv Group Corporation, the principal operating subsidiary of the Company;

 

   

Vertiv Group Intermediate” are to Vertiv Intermediate Holding II Corporation;

 

   

Vertiv Holdco” are to Vertiv Intermediate Holding Corporation;

 

   

Vertiv Holdings” are to Vertiv Holdings, LLC, a Delaware limited liability company and the direct parent of Vertiv Holding Corporation;

 

   

Vertiv Holding Corporation” are to Vertiv Holding Corporation, a Delaware corporation;

 

   

Vertiv Predecessor” are to the Network Power business previously owned by Emerson Electric Co. and the predecessor of Vertiv Group for accounting purposes;

 

   

Vertiv Stockholder” are to VPE Holdings, LLC; and

 

   

warrants” are to public warrants and private placement warrants.

Unless otherwise stated in this proxy statement or as the context otherwise requires, (1) all references in this proxy statement to Class A common stock or warrants include such securities underlying the units and (2) all references in this proxy statement to public stockholders who “properly exercise their redemption rights” or similar references mean public stockholders who properly exercise, and do not properly withdraw, such election.

NON-GAAP FINANCIAL MEASURES

Financial statements included in this proxy statement have been prepared in accordance with GAAP. We have included certain non-GAAP financial measures in this proxy statement, as further described below, that may not be directly comparable to other similarly titled measures used by other companies and therefore may not be comparable among companies. For purposes of Regulation G and Section 10(e) of Regulation S-K, a non-GAAP financial measure is a numerical measure of a company’s historical or future financial performance, financial position or cash flows that excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the statements of operations, balance sheets, or statement of cash flows of the company; or includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from most directly comparable measure so calculated and presented. Pursuant to the requirements of Regulation G, we have provided reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures. These non-GAAP measures are provided because Vertiv’s management uses these financial measures in monitoring and evaluating our ongoing results and trends.

EBITDA and Adjusted EBITDA

Vertiv’s non-GAAP financial measures include:

 

   

EBITDA, which represents earnings (loss) from continuing operations before interest expense, income tax expense (benefit), and depreciation and amortization; and

 

   

Adjusted EBITDA, which represents EBITDA, adjusted to exclude certain unusual or non-recurring items, certain non-cash items and other items that are not indicative of ongoing operations.

EBITDA and Adjusted EBITDA are not recognized terms under GAAP and do not purport to be an alternative measure to Net earnings (loss) (the most directly comparable GAAP measure). Additionally, EBITDA and Adjusted EBITDA are not intended to be measures of free cash flow available for management’s discretionary use, as these metrics do not consider certain cash requirements, such as tax payments and debt service requirements. We believe that presenting these measures may help investors better

 

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understand Vertiv’s financial performance in connection with their analysis of Vertiv’s business. EBITDA and Adjusted EBITDA should be considered in addition to, not a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. You are encouraged to evaluate each adjustment and the reasons we consider them appropriate for supplemental analysis. In evaluating EBITDA and Adjusted EBITDA, you should be aware that in the future we may incur expenses similar to the adjustments used to define Adjusted EBITDA in this proxy statement. The use of EBITDA and Adjusted EBITDA in this proxy statement should not be construed as an inference that future results will be unaffected by unusual or non-recurring items. Additionally, because not all companies use identical calculations, the presentations of EBITDA and Adjusted EBITDA may not be comparable to similarly titled measures of other companies.

EBITDA and Adjusted EBITDA have limitations as analytical tools, and you should not consider each in isolation or as a substitute for analysis of Vertiv’s results as reported under GAAP. Some of these limitations are:

 

   

they do not reflect Vertiv’s cash expenditures, or future requirements for capital expenditures or contractual commitments;

 

   

they do not reflect changes in, or cash requirements for, Vertiv’s working capital needs;

 

   

they do not reflect the interest expense, or the cash requirements necessary to service interest on Vertiv’s debt;

 

   

they do not reflect Vertiv’s income tax expense or the cash requirements to pay Vertiv’s taxes;

 

   

although depreciation, accretion and amortization are non-cash charges, the assets being depreciated, accreted and amortized will often have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements; and

 

   

other companies in our industry may measure EBITDA and Adjusted EBITDA differently than Vertiv does, limiting their usefulness as a comparative measure.

See “Selected Consolidated Historical Financial and Other Information of Vertiv Holdings” for a reconciliation of these measures to Vertiv’s most directly comparable GAAP measure, and “Vertiv Holdings, LLC Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Other Non-GAAP Measures

Vertiv’s management believes that the following additional non-GAAP financial measures provide investors and analysts useful insight into Vertiv’s financial position and Vertiv’s operating performance. These non-GAAP measures, as presented in this proxy statement, are supplemental measures of Vertiv’s performance that are not required by, or presented in accordance with, GAAP. As with the EBITDA and Adjusted EBITDA metrics referenced above, these additional non-GAAP measures are not measures of Vertiv’s financial performance under GAAP, and any non-GAAP measure provided should be viewed in addition to, and not as an alternative to, the most directly comparable measure determined in accordance with GAAP. Further, the calculation of these non-GAAP financial measures may differ from the calculation of similarly titled financial measures presented by other companies and therefore may not be comparable among companies.

We present Vertiv’s underlying sales in this proxy statement, which are calculated to exclude the impact of acquisitions, divestitures and fluctuations in foreign currency exchange rates during the applicable periods presented, in order to facilitate the period-to-period comparisons of Vertiv’s sales growth by excluding those items that impact overall comparability. The presentation of underlying sales also includes a reconciliation of each underlying sales metric that is presented in this proxy statement to net sales, which is the most directly comparable GAAP measure.

See “Selected Consolidated Historical Financial and Other Information of Vertiv Holdings ” for a reconciliation of Non-GAAP measures to our most directly comparable GAAP measures, and “Vertiv Holdings, LLC Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

 

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This proxy statement contains statements that are forward-looking and as such are not historical facts. This includes, without limitation, statements regarding the financial position, business strategy and the plans and objectives of management for future operations, including as they relate to the potential Business Combination, of the Company. These statements constitute projections, forecasts and forward-looking statements, and are not guarantees of performance. Such statements can be identified by the fact that they do not relate strictly to historical or current facts. When used in this proxy statement, words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “strive,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. When the Company discusses its strategies or plans, including as they relate to the potential Business Combination, it is making projections, forecasts or forward-looking statements. Such statements are based on the beliefs of, as well as assumptions made by and information currently available to, the Company’s management.

Forward-looking statements in this proxy statement may include, for example, statements about:

 

   

GSAH’s ability to complete the Business Combination or, if GSAH does not complete the Business Combination, any other initial business combination;

 

   

satisfaction or waiver (if applicable) of the conditions to the Business Combination, including, among other things: the satisfaction or waiver of certain customary closing conditions, including, among others, the Minimum Required Funds Condition, receipt of approvals from competition authorities in certain foreign jurisdictions (or expiration of applicable waiting periods in those jurisdictions), receipt of certain lender consents under Vertiv’s Existing Credit Agreements (as defined below), the existence of no material adverse effect at the Company or Vertiv and receipt of certain stockholder approvals contemplated by this proxy statement;

 

   

the occurrence of any other event, change or other circumstances that could give rise to the termination of the Merger Agreement;

 

   

the projected financial information, anticipated growth rate, and market opportunity of Vertiv;

 

   

the ability to obtain or maintain the listing of the post-business combination company’s Class A common stock, warrants and units on the NYSE following the Business Combination;

 

   

our public securities’ potential liquidity and trading;

 

   

our ability to consummate the PIPE Investment or raise financing in the future;

 

   

our success in retaining or recruiting, or changes required in, our officers, key employees or directors following the completion of the Business Combination;

 

   

members of GSAH’s management team allocating their time to other businesses and potentially having conflicts of interest with GSAH’s business or in approving the Business Combination;

 

   

the use of proceeds not held in the trust account or available to us from interest income on the trust account balance;

 

   

factors relating to the business, operations and financial performance of Vertiv and its subsidiaries, including:

 

   

global economic weakness and uncertainty;

 

   

risks relating to the continued growth of Vertiv’s customers’ markets;

 

   

failure to meet or anticipate technology changes;

 

   

the unpredictability of Vertiv’s future operational results;

 

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disruption of Vertiv’s customers’ orders or Vertiv’s customers’ markets;

 

   

less favorable contractual terms with large customers;

 

   

risks associated with governmental contracts;

 

   

failure to mitigate risks associated with long-term fixed price contracts;

 

   

risks associated with information technology disruption or security;

 

   

risks associated with the implementation and enhancement of information systems;

 

   

failure to properly manage Vertiv’s supply chain or difficulties with third-party manufacturers;

 

   

competition in the infrastructure technologies industry;

 

   

failure to realize the expected benefit from any rationalization and improvement efforts;

 

   

disruption of, or changes in, Vertiv’s independent sales representatives, distributors and original equipment manufacturers;

 

   

failure to obtain performance and other guarantees from financial institutions;

 

   

failure to realize sales expected from Vertiv’s backlog of orders and contracts;

 

   

changes to tax law;

 

   

ongoing tax audits;

 

   

risks associated with future legislation and regulation of Vertiv’s customers’ markets both in the United States and abroad;

 

   

costs or liabilities associated with product liability;

 

   

Vertiv’s ability to attract, train and retain key members of its leadership team and other qualified personnel;

 

   

the adequacy of Vertiv’s insurance coverage;

 

   

a failure to benefit from future acquisitions;

 

   

failure to realize the value of goodwill and intangible assets;

 

   

the global scope of Vertiv’s operations;

 

   

risks associated with Vertiv’s sales and operations in emerging markets;

 

   

exposure to fluctuations in foreign currency exchange rates;

 

   

Vertiv’s ability to comply with various laws and regulations and the costs associated with legal compliance;

 

   

adverse outcomes to any legal claims and proceedings filed by or against us;

 

   

Vertiv’s ability to protect or enforce its proprietary rights on which its business depends;

 

   

third party intellectual property infringement claims;

 

   

liabilities associated with environmental, health and safety matters;

 

   

risks associated with Vertiv’s limited history of operating as an independent company;

 

   

potential net losses in future periods; and

 

   

other factors detailed under the section entitled “Risk Factors.”

The forward-looking statements contained in this proxy statement are based on current expectations and beliefs concerning future developments and their potential effects on us or Vertiv. There can be no assurance that future developments affecting us or Vertiv will be those that we or Vertiv have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond GSAH’s control or the

 

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control of Vertiv) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described under the heading “Risk Factors.” Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. Neither we nor Vertiv undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

Before any GSAH stockholder grants its proxy or instructs how its vote should be cast or votes on the proposals to be put to the Special Meeting, such stockholder should be aware that the occurrence of the events described in the “Risk Factors” section and elsewhere in this proxy statement may adversely affect us.

 

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SUMMARY TERM SHEET

This summary term sheet, together with the sections entitled “Questions and Answers About the Proposals for Our Stockholders” and “Summary of the Proxy Statement,” summarizes certain information contained in this proxy statement, but does not contain all of the information that is important to you. You should read this proxy statement, including the attached Annexes and the accompanying financial statements of the Company and Vertiv Holdings, carefully and in its entirety for a more complete understanding of the matters to be considered at the Special Meeting.

 

   

GS Acquisition Holdings Corp, a Delaware corporation, is a special purpose acquisition company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses.

 

   

On June 12, 2018, we completed our IPO of 69,000,000 units, including 9,000,000 units issued pursuant to the exercise by the underwriters of their option to purchase additional units in full, at a price of $10.00 per unit, generating proceeds to us of $690,000,000 before underwriting discounts and expenses. Each unit consisted of one share of Class A common stock and one-third of one redeemable warrant, with each whole warrant exercisable for one share of Class A common stock at a price of $11.50 per share. Simultaneously with the closing of the IPO, we closed the private placement of an aggregate of 10,533,333 warrants, each exercisable to purchase one share of our Class A common stock at an exercise price of $11.50 per share, to the Sponsor, at a price of $1.50 per private placement warrant, generating proceeds of $15,800,000. Each warrant sold in the IPO and the private placement will become exercisable 30 days after the completion of our initial business combination, and will expire at 5:00 p.m., New York City time, five years after the completion of our initial business combination or earlier upon redemption or liquidation. Subject to the terms and conditions contained in the warrant agreement governing the warrants (the “warrant agreement”), we may redeem the warrants either for cash once the warrants become exercisable or for shares of our Class A common stock commencing 90 days after the warrants become exercisable. For more information regarding the warrants, please see the section entitled “Description of Securities.”

 

   

Vertiv is a global leader in the design, manufacturing and servicing of critical digital infrastructure technology that powers, cools, deploys, secures and maintains electronics that process, store and transmit data. Vertiv provides this technology to data centers, communication networks and commercial & industrial environments worldwide. Vertiv aims to help create a world where critical technologies always work, and where it empowers the vital applications of the digital world. For more information about Vertiv, see “Information About Vertiv,” “Vertiv Holdings’ Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Management after the Business Combination.”

 

   

On December 10, 2019, the Company, Vertiv Holdings, the Vertiv Stockholder, First Merger Sub and Second Merger Sub entered into the Merger Agreement. The Merger Agreement provides for, among other things, (1) the merger of First Merger Sub with and into Vertiv Holdings, with Vertiv Holdings continuing as the surviving entity and (2) immediately following the First Merger and as part of the same overall transaction as the First Merger, the merger of Vertiv Holdings with and into Second Merger Sub with Second Merger Sub continuing as the surviving entity, which will be renamed “Vertiv Holdings, LLC,” in each case, in accordance with the terms and subject to the conditions of the Merger Agreement as more fully described elsewhere in this proxy statement. Following the closing of the Business Combination, (a) the Company will own all the equity interests of Vertiv Holdings and (b) the Vertiv Stockholder, the sole equity owner of Vertiv Holdings prior to the Business Combination, will hold a portion of the Company’s Class A common stock.

 

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In accordance with the terms and subject to the conditions of the Merger Agreement, the aggregate merger consideration payable by us in connection with the Business Combination is expected to be approximately equal to the sum of (A) $5.095 billion (the “Merger Consideration”), which amount will be (1) increased by the amount of cash held by Vertiv Holdings and its subsidiaries as of 12:01 a.m., local time in each applicable jurisdiction, on the date of the closing of the Business Combination; (2) decreased by the amount of Vertiv Holdings’ outstanding indebtedness as of 12:01 a.m., local time in each applicable jurisdiction, on the date of the closing of the Business Combination; (3) decreased by the aggregate amount of certain transaction expenses incurred by Vertiv Holdings or its subsidiaries to the extent unpaid as of the date of the closing of the Business Combination; and (4) decreased by the amount equal to the lesser of (x) an amount equal to 50% of the cost of any representation and warranty insurance policy bound and issued in connection with the Business Combination and (y) $2,500,000 plus (B) payments made pursuant to the Tax Receivable Agreement (as described below) in respect of the cash tax savings realized (or deemed realized) in periods after the closing of the Business Combination as a result of certain pre-existing tax assets and attributes of Vertiv.

 

   

The Merger Consideration will be paid in a combination of cash and stock. The amount of the cash consideration payable to the Vertiv Stockholder at the closing of the Business Combination (the “Cash Consideration”) is $415.0 million, subject to adjustment as described below. The remainder of the consideration paid to the Vertiv Stockholder at the closing of the Business Combination will be the Stock Consideration, consisting of approximately 127.5 million newly-issued shares of our Class A common stock, subject to adjustment as described below, which shares will be valued at $10.00 per share for purposes of determining the aggregate number of shares of our Class A common stock payable to the Vertiv Stockholder as part of the Merger Consideration. In addition, the Vertiv Stockholder may be entitled to receive additional merger consideration in the form of amounts payable under the Tax Receivable Agreement to be entered into at the closing of the Business Combination, substantially in the form attached as Annex F to this proxy statement. The number of shares of our Class A common stock issued to the Vertiv Stockholder as Stock Consideration is subject to adjustment, depending on, among other things, the level of redemptions of shares of Class A common stock by our public stockholders. For more information about the Merger Agreement, please see the section entitled “Proposal No. 1—Approval of the Business Combination—The Merger Agreement.”

 

   

At the closing of the Business Combination, we will enter into the Tax Receivable Agreement, substantially in the form attached as Annex F, with the Vertiv Stockholder. The Tax Receivable Agreement will generally provide for the payment by us to the Vertiv Stockholder of 65% of the cash tax savings realized (or deemed realized) in periods after the closing of the Business Combination as a result of certain pre-existing tax assets and attributes of Vertiv. We expect to retain the benefit of the remaining 35% of these cash tax savings. For more information about the Tax Receivable Agreement, please see the section entitled “Proposal No. 1—Approval of the Business Combination—The Related Agreements—Tax Receivables Agreement.”

 

   

The PIPE Investors and the Subscribing Vertiv Executives have agreed to purchase in the aggregate approximately 123,900,000 shares of Class A common stock, for approximately $1,239,000,000 of gross proceeds, in the PIPE Investment, a portion of which is expected to be funded by the Sponsor Related PIPE Investors. In this proxy statement, we assume that approximately $1,944.0 million of the gross proceeds from the PIPE Investment and funds held in the trust account will be used to fund the Cash Consideration, the repayment of approximately $1,479.0 million under the no redemption scenario and $1,113.0 million under the maximum redemption scenario of Vertiv’s existing indebtedness and the payment of certain transaction expenses. For more information, see “Summary of the Proxy Statement—Sources and Uses of Funds for the Business Combination.”

 

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Prior to the closing of the Business Combination, the Vertiv Stockholder owns all of the outstanding equity interests of Vertiv Holdings. The following diagram illustrates the ownership of Vertiv Holdings and its subsidiaries Vertiv Holding Corporation, Vertiv Holdco, Vertiv Group Intermediate and Vertiv Group, as of the date of this proxy statement.

 

LOGO

 

   

It is anticipated that, upon completion of the Business Combination: (1) the Company’s public stockholders will own approximately 20% of our outstanding common stock; (2) the PIPE Investors (including the Sponsor Related PIPE Investors) and the Subscribing Vertiv Executives will own approximately 37% of our outstanding common stock; (3) the Sponsor and our other Initial Stockholders will own approximately 5% of our outstanding common stock; and (4) the Vertiv Stockholder will own approximately 38% of our outstanding common stock. These levels of ownership interest assume (a) that no shares are elected to be redeemed in connection with the Business Combination and (b) that we issue 127.5 million shares of common stock to the Vertiv Stockholder as part of the Merger Consideration in connection with the Merger Agreement. In addition, the ownership percentage with respect to the post-business combination company (a) does not take into account (1) warrants to purchase Class A common stock that will remain outstanding immediately following the Business Combination or (2) the issuance of any shares upon completion of the Business Combination under the Incentive Plan, but (b) does include founder shares, which will automatically convert into shares of Class A common stock on a one-for-one basis upon the consummation of the Business Combination (such shares of Class A common stock will be subject to transfer restrictions). If the actual facts are different from these assumptions, the above levels of ownership interest will be different. The following diagram illustrates the anticipated ownership structure of Vertiv Holdings and its subsidiaries Vertiv Holding Corporation, Vertiv Holdco, Vertiv Group Intermediate and Vertiv Group immediately following the consummation of the Business Combination.(1)

 

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LOGO

 

  (1)

Percentages presented assume no redemptions of public shares in connection with the Business Combination.

  (2)

Represents 123,900,000 shares of the Company’s Class A common stock, including 23 million shares subscribed for by the Sponsor Related PIPE Investors and 449,098 shares subscribed for by the Subscribing Vertiv Executives. See “Proposal No. 1—Approval of the Business Combination—Related Agreements—Subscription Agreements.”

  (3)

Percentage presented does not include shares subscribed for by the Sponsor Related PIPE Investors in the PIPE Investment.

 

   

For more information, see “Summary of the Proxy Statement— Ownership of the Company Following the Business Combination” and “Unaudited Pro Forma Condensed Combined Financial Information.”

 

   

In evaluating the Business Combination, our Board considered a number of factors, including Vertiv’s highly attractive business model, Vertiv’s deep relationships with a diverse customer base, Vertiv’s strong recurring revenue, Vertiv’s experienced and proven management team, Vertiv’s strong balance sheet, other alternatives, terms of the Merger Agreement, continued ownership by sellers and the role of the independent directors. For more information about our decision-making process, as well as other factors, uncertainties and risks considered, see the section entitled “Proposal No. 1—Approval of the Business Combination— GSAH’s Board of Directors’ Reasons for the Approval of the Business Combination.”

 

   

Pursuant to the GSAH Certificate of Incorporation, a public stockholder may request that we redeem all or a portion of such stockholder’s public shares for cash if the Business Combination is consummated. Holders of units must elect to separate the units into the underlying public shares and warrants prior to exercising redemption rights with respect to the public shares. If holders hold their units through a broker, bank or other nominee, holders must notify their broker, bank or other nominee that they elect to separate the units into the underlying public shares and warrants, or if a holder holds units registered in its own name, the holder must contact Computershare Trust Company, N.A., our

 

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transfer agent, directly and instruct it to do so. Public stockholders may elect to redeem their public shares even if they vote “FOR” the Business Combination Proposal or any other proposal. If the Business Combination is not consummated, the public shares will be returned to the respective holder, broker, bank or other nominee. If the Business Combination is consummated, and if a public stockholder properly exercises its right to redeem all or a portion of the public shares that it holds, including by timely delivering its shares to our transfer agent, we will redeem such public shares for a per-share price, payable in cash, equal to the pro rata portion of the trust account, calculated as of two business days prior to the consummation of the Business Combination, including interest (net of taxes payable). For illustrative purposes, as of January 15, 2020, this would have amounted to approximately $10.25 per outstanding public share. If a public stockholder properly exercises its redemption rights in full, then it will be electing to exchange all of its public shares for cash and will not own any public shares of the post-business combination company. Holders of our outstanding warrants do not have redemption rights in connection with the Business Combination. Please see the section entitled “Special Meeting of the GSAH Stockholders—Redemption Rights.”

 

   

In addition to voting on the proposal to approve and adopt the Merger Agreement and approve the Business Combination (we refer to this proposal as the “Business Combination Proposal”), at the Special Meeting, our stockholders will be asked to vote upon:

 

   

a proposal to approve, for purposes of complying with applicable listing rules of the NYSE, the issuance of more than 20% of the Company’s outstanding common stock in connection with the Business Combination, including up to 23 million shares of our Class A common stock to the Sponsor Related PIPE Investors and up to 449,098 shares of our Class A common stock to the Subscribing Vertiv Executives (we refer to this proposal as the “NYSE Proposal”);

 

   

six separate proposals relating to adopting the New Vertiv Certificate of Incorporation, which, if approved, would take effect upon the closing of the Business Combination (we refer to these proposals, collectively, as the “Charter Proposals”);

 

   

if you are a holder of our Class B common stock, a proposal to elect nine directors to serve, effective upon the closing of the Business Combination, with each director on our Board having a term that expires at the post-business combination company’s annual meeting of stockholders in 2021, and until their respective successors are duly elected and qualified, or until their earlier resignation, removal or death (we refer to this proposal as the “Director Election Proposal”);

 

   

a proposal to approve the Incentive Plan, including the authorization of the initial share reserve under the Incentive Plan (we refer to this proposal as the “Incentive Plan Proposal”); and

 

   

a proposal to adjourn the Special Meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event there are insufficient votes for, or for any other reason in connection with, the approval of one or more of the other proposals at the Special Meeting (we refer to this proposal as the “Adjournment Proposal”).

See “Proposal No. 1—Approval of the Business Combination,” “Proposal No. 2—Approval of the Issuance of More than 20% of the Company’s Outstanding Common Stock in Connection with the Business Combination,” “Proposal No. 3—Approval of the Second Amended and Restated Certificate of Incorporation,” “Proposal No. 4—Election of Directors to the Board of Directors,” “Proposal No. 5—Approval of the Incentive Plan, Including the Authorization of the Initial Share Reserve Under the Incentive Plan” and “Proposal No. 6—The Adjournment Proposal.” The Business Combination is conditioned on the approval of each of the Condition Precedent Proposals at the Special Meeting. Each of the Condition Precedent Proposals is cross-conditioned on the approval of each other. The Adjournment Proposal is not conditioned upon the approval of any other proposal. Each of these proposals is more fully described in this proxy statement, which each stockholder is encouraged to read carefully and in its entirety.

 

   

Upon consummation of the Business Combination, our Board anticipates increasing its initial size from five directors to nine directors, with each director on our Board having a term that expires at the post-

 

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business combinations company’s annual meeting of stockholders in 2021, and until their respective successors are duly elected and qualified, or until their earlier resignation, removal or death. Please see the sections entitled “Proposal No. 4—Election of Directors to the Board of Directors” and “Management After the Business Combination” for additional information.

 

   

Unless waived by the parties to the Merger Agreement, and subject to applicable law, the closing of the Business Combination is subject to a number of conditions set forth in the Merger Agreement including, among others, the Minimum Required Funds Condition, receipt of approvals from competition authorities in certain foreign jurisdictions (or expiration of applicable waiting periods in those jurisdictions), receipt of certain lender consents under Vertiv’s Existing Credit Agreements, the existence of no material adverse effect at the Company or Vertiv and receipt of certain stockholder approvals contemplated by this proxy statement. These conditions to closing in the Merger Agreement are for the sole benefit of the parties thereto and may be waived by such parties. There can be no assurance that the parties to the Merger Agreement would waive any such provision of the Merger Agreement. For more information about the closing conditions to the Business Combination, please see the section entitled “Proposal No. 1—Approval of the Business Combination—The Merger Agreement—Conditions to Closing of the Business Combination.”

 

   

The Merger Agreement may be terminated at any time prior to the consummation of the Business Combination upon agreement of the parties thereto, or by GSAH or the Vertiv Stockholder in specified circumstances. For more information about the termination rights under the Merger Agreement, please see the section entitled “Proposal No. 1—Approval of the Business Combination—The Merger Agreement—Termination.”

 

   

The proposed Business Combination, including our business following the Business Combination, involves numerous risks. For more information about these risks, please see the section entitled “Risk Factors.”

 

   

When you consider the recommendation of our Board in favor of approval of the Business Combination Proposal and the other proposals included herein, you should keep in mind that the Sponsor and our directors have interests in such proposal that are different from, or in addition to, those of our stockholders and warrant holders generally. Our Board was aware of and considered these interests, among other matters, in evaluating and negotiating the Business Combination and transaction agreements and in recommending to our stockholders that they vote in favor of the proposals presented at the Special Meeting, including the Business Combination Proposal. GSAH stockholders should take these interests into account in deciding whether to approve the proposals presented at the Special Meeting, including the Business Combination Proposal. These interests include, among other things:

 

   

If we do not consummate a business combination by June 12, 2020 (or if such date is extended at a duly called meeting of our stockholders, such later date), we would (1) cease all operations except for the purpose of winding up; (2) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (which interest shall be net of taxes payable, and less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any); and (3) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our Board, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. In such event, the 17,250,000 shares of Class B common stock owned by our Initial Stockholders, including the Sponsor, would be worthless because following the redemption of the public shares, we would likely have few, if any, net assets and because our Sponsor and each of our officer and directors have agreed to waive their rights to liquidating distributions from the trust account with respect to such shares if we fail to complete a

 

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business combination within the required period. Additionally, in such event, the 10,533,333 private placement warrants that the Sponsor paid $15.8 million for will expire worthless. Certain of our directors, including David M. Cote, have a direct or indirect economic interest in such shares and private placement warrants. The 17,250,000 shares of Class A common stock that the Initial Stockholders will hold following the Business Combination, if unrestricted and freely tradable, would have had aggregate market value of approximately $201.3 million based upon the closing price of $11.67 per share of Class A common stock on the NYSE on January 16, 2020, the most recent practicable date prior to the date of this proxy statement. Given such shares of our common stock will be subject to certain restrictions, we believe such shares have less value. The 10,533,333 private placement warrants that the Sponsor will hold following the Business Combination, if unrestricted and freely tradable, would have had an aggregate market value of approximately $28.4 million based upon the closing price of $2.70 per warrant on the NYSE on January 16, 2020, the most recent practicable date prior to the date of this proxy statement.

 

   

David M. Cote, our Chief Executive Officer, President and Secretary, and Chairman of our Board, is expected to be the Executive Chairman of our Board after the consummation of the Business Combination. Roger Fradin and Steven S. Reinemund, both of whom are our directors, are expected to be on our Board after consummation of the Business Combination. As such, in the future, Mr. Cote, Mr. Fradin and Mr. Reinemund will receive any cash fees, stock options, stock awards or other remuneration that our Board determines to pay to them.

 

   

Our existing officer and directors will be eligible for continued indemnification and continued coverage under a directors’ and officers’ liability insurance policy after the Mergers and pursuant to the Merger Agreement.

 

   

In order to protect the amounts held in the trust account, the Sponsor has agreed that it will be liable to us if and to the extent any claims by a third party (other than our independent registered public accounting firm) for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amount of funds in the trust account to below: (1) $10.00 per public share; or (2) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account due to reductions in the value of the trust assets, in each case, net of the interest which may be withdrawn to pay taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the trust account and except as to any claims under our indemnity of the underwriters of our IPO against certain liabilities, including liabilities under the Securities Act.

 

   

Upon completion of the Business Combination, an aggregate amount of approximately $50 million in deferred underwriting discount, advisory fees and placement agent fees, will be payable to Goldman Sachs & Co. LLC, an affiliate of us and the Sponsor. Additionally, Raanan A. Agus is a Participating Managing Director of Goldman Sachs and one of our directors.

 

   

Affiliates of Goldman Sachs are lenders to Vertiv under the Term Loan Facility and Asset-Based Revolving Credit Facility, with an aggregate of approximately $23.5 million and approximately $16.3 million outstanding to such affiliates in the Term Loan Facility and the Asset-Based Revolving Credit Facility, respectively, as of the date of this proxy statement. We intend to use a portion of the proceeds from the Business Combination, including the PIPE Investment, to repay a portion of the outstanding Term Loan Facility and, as a result, such affiliates would receive their pro rata portion of such proceeds. In addition, as of the date of this proxy statement, affiliates of Goldman Sachs hold an aggregate of approximately $180,000 of the Existing Notes.

 

   

The Sponsor Related PIPE Investors have subscribed for $230 million of the PIPE Investment, for which they will receive up to 23 million shares of our Class A common stock. See “Certain Relationships and Related Persons Transactions—GSAH’s Related Party Transactions—Subscription Agreements.”

 

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Pursuant to the Amended and Restated Registration Rights Agreement (as defined below), our Initial Stockholders, the Sponsor Related PIPE Investors, the Vertiv Stockholder and others party thereto will have customary registration rights, including demand and piggy-back rights, subject to cooperation and cut-back provisions with respect to the shares of Class A common stock and warrants held by such parties.

 

   

The New Vertiv Certificate of Incorporation will contain a provision that expressly elects not to be governed by Section 203 (Delaware’s “interested stockholder” statute) of the Delaware General Corporation Law.

 

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QUESTIONS AND ANSWERS ABOUT THE PROPOSALS FOR OUR STOCKHOLDERS

The questions and answers below highlight only selected information from this document and only briefly address some commonly asked questions about the proposals to be presented at the Special Meeting, including with respect to the proposed Business Combination. The following questions and answers do not include all the information that is important to our stockholders. We urge our stockholders to read this proxy statement, including the Annexes and the accompanying financial statements of the Company and Vertiv Holdings carefully and in their entirety to fully understand the proposed Business Combination and the voting procedures for the Special Meeting, which will be held on February 6, 2020 at 11:00 a.m. Pacific Time at the offices of Goldman Sachs, located at Fox Plaza, 2121 Avenue of the Stars, Suite 2600, Los Angeles, CA 90067, or at such other time, on such other date and at such other place to which the meeting may be adjourned or postponed.

 

Q:

Why am I receiving this proxy statement?

 

A:

Our stockholders are being asked to consider and vote upon, among other proposals, a proposal to approve and adopt the Merger Agreement and approve Business Combination. The Merger Agreement provides for, among other things, (1) the merger of First Merger Sub with and into Vertiv Holdings, with Vertiv Holdings continuing as the surviving entity; and (2) immediately following the First Merger and as part of the same overall transaction as the First Merger, the merger of Vertiv Holdings with and into Second Merger Sub with Second Merger Sub continuing as the surviving entity, in each case, in accordance with the terms and subject to the conditions of the Merger Agreement as more fully described elsewhere in this proxy statement. In accordance with the terms and subject to the conditions of the Merger Agreement, the Merger Consideration payable by us in connection with the Business Combination is expected to be approximately $5.095 billion, subject to adjustment as described herein plus the value of payments made pursuant to the Tax Receivable Agreement in respect of the cash tax savings realized (or deemed realized) in periods after the closing of the Business Combination as a result of certain pre-existing tax assets and attributes of Vertiv. See the section entitled “Proposal No. 1—Approval of the Business Combination” for more detail.

A copy of the Merger Agreement is attached to this proxy statement as Annex A and you are encouraged to read it carefully and in its entirety.

THE VOTE OF STOCKHOLDERS IS IMPORTANT. STOCKHOLDERS ARE ENCOURAGED TO VOTE AS SOON AS POSSIBLE AFTER READING THIS PROXY STATEMENT, INCLUDING THE ANNEXES AND THE ACCOMPANYING FINANCIAL STATEMENTS OF THE COMPANY AND VERTIV HOLDINGS, CAREFULLY AND IN ITS ENTIRETY.

 

Q:

When and where is the Special Meeting?

 

A:

The Special Meeting will be held on February 6, 2020 at 11:00 a.m. Pacific Time at the offices of Goldman Sachs, located at Fox Plaza, 2121 Avenue of the Stars, Suite 2600, Los Angeles, CA 90067, or at such other time, on such other date and at such other place to which the meeting may be adjourned or postponed.

 

Q:

What are the specific proposals on which I am being asked to vote at the Special Meeting?

 

A:

In addition to voting on a proposal to approve and adopt the Merger Agreement and approve the Business Combination, at the Special Meeting, GSAH is asking holders of its common stock to consider and vote upon:

 

   

a proposal to approve, for purposes of complying with applicable listing rules of the NYSE, the issuance of more than 20% of the Company’s outstanding common stock in connection with the Business Combination, including up to 23,000,000 shares of our Class A common stock to the Sponsor Related PIPE Investors and up to 449,098 shares of our Class A common stock to the Subscribing Vertiv Executives;

 

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the following six separate proposals relating to adopting the New Vertiv Certificate of Incorporation, which, if approved, would take effect upon the closing of the Business Combination:

 

   

to (i) increase the number of authorized shares of capital stock, (ii) automatically convert each share of Class B common stock into one share of Class A common stock immediately prior to the consummation of the Business Combination, (iii) following such conversion, reduce the authorized shares of Class B common stock to zero and (iv) provide for certain conforming changes to the GSAH Certificate of Incorporation given the elimination of any authorized Class B common stock;

 

   

to provide that the number of directors of the Company will be fixed from time to time exclusively by our Board pursuant to a resolution adopted by a majority of our Board;

 

   

to provide a special exemption to the doctrine of corporate opportunity for each of Platinum Equity, the investment funds affiliated with or managed by Platinum Equity and the other Exempted Persons (as defined below);

 

   

to elect not to be governed by Section 203 of the DGCL and, instead, be governed by a provision substantially similar to Section 203 of the DGCL, except that such provision excludes investment funds affiliated with the Sponsor, GS Sponsor LLC and Platinum Equity and their respective successors and affiliates;

 

   

to require the approval of at least two-thirds of the voting power of our outstanding capital stock to amend certain provisions of the New Vertiv Certificate of Incorporation; and

 

   

to provide for several changes to the New Vertiv Certificate of Incorporation, including (i) removal of certain listed actions that would allow for personal liability of the Company’s directors to the Company and its stockholders, (ii) certain provisions regarding indemnification of directors and officers, (iii) removal of various provisions in the GSAH Certificate of Incorporation applicable to blank check companies that will no longer be applicable to the Company, (iv) addition of a provision whereby no class vote is required to change the authorized number of shares of such class, (v) changing the name of the Company to “Vertiv Holdings Co” and (vi) other conforming changes from the GSAH Certificate of Incorporation based on the Charter Proposals;

 

   

a proposal to elect nine directors to serve, effective upon the closing of the Business Combination, with each director on our Board having a term that expires at the post-business combination company’s annual meeting of stockholders in 2021, and until their respective successors are duly elected and qualified, or until their earlier resignation, removal or death;

 

   

a proposal to approve the Incentive Plan, including the authorization of the initial share reserve under the Incentive Plan; and

 

   

a proposal to adjourn the Special Meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event there are insufficient votes for, or for any other reason in connection with, the approval of one or more of the other proposals at the Special Meeting.

If our stockholders do not approve each of the Condition Precedent Proposals, then unless certain conditions in the Merger Agreement are waived by the applicable parties to the Merger Agreement, the Merger Agreement could terminate and the Business Combination may not be consummated. See “Proposal No. 1—Approval of the Business Combination,” “Proposal No. 2—Approval of the Issuance of More than 20% of the Company’s Outstanding Common Stock in Connection with the Business Combination and the Private Placement,” “Proposal No. 3—Approval of the Second Amended and Restated Certificate of Incorporation,” “Proposal No. 4—Election of Directors to the Board of Directors,” “Proposal No. 5—Approval of the Incentive Plan, Including the Authorization of the Initial Share Reserve Under the Incentive Plan” and “Proposal No. 6—The Adjournment Proposal.”

 

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We will hold the Special Meeting to consider and vote upon these proposals. This proxy statement contains important information about the Business Combination and the other matters to be acted upon at the Special Meeting. Our stockholders should read it carefully and in its entirety.

After careful consideration, GSAH’s Board of Directors has determined that the Business Combination Proposal, the NYSE Proposal, each of the Charter Proposals, the Director Election Proposal, the Incentive Plan Proposal and the Adjournment Proposal are in the best interests of GSAH and its stockholders and unanimously recommends that you vote or give instruction to vote “FOR” each of those proposals.

The existence of financial and personal interests of one or more of GSAH’s directors may result in a conflict of interest on the part of such director(s) between what he or they may believe is in the best interests of GSAH and its stockholders and what he or they may believe is best for himself or themselves in determining to recommend that stockholders vote for the proposals. See “Proposal No. 1—Interests of GSAH’s Management Team in the Business Combination” for a further discussion of these considerations.

 

Q:

Are the proposals conditioned on one another?

 

A:

Yes. The Business Combination is conditioned on the approval of each of the Condition Precedent Proposals at the Special Meeting. Each of the Condition Precedent Proposals is cross-conditioned on the approval of each other. The Adjournment Proposal is not conditioned upon the approval of any other proposal.

 

Q:

Why is GSAH proposing the Business Combination?

 

A:

GSAH was organized to effect a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses.

Vertiv represents a global leader in the design, manufacturing and servicing of critical digital infrastructure technology that powers, cools, deploys, secures and maintains electronics that process, store and transmit data. Vertiv provides this technology to data centers, communication networks and commercial & industrial environments worldwide. Vertiv aims to help create a world where critical technologies always work, and where it empowers the vital applications of the digital world. For more information about Vertiv see “Information about Vertiv.”

Based on its due diligence investigations of Vertiv and the industry in which it operates, including the financial and other information provided by Vertiv in the course of our due diligence investigations, our Board believes that the Business Combination with Vertiv is in the best interests of us and our stockholders and presents an opportunity to increase stockholder value. However, there is no assurance of this. See “Proposal No. 1—Approval of the Business CombinationGSAH’s Board of Directors’ Reasons for the Approval of the Business Combination” for additional information.

Although our Board believes that the Business Combination with Vertiv presents a unique business combination opportunity and is in the best interests of us and our stockholders, our Board did consider certain potentially material negative factors in arriving at that conclusion. These factors are discussed in greater detail in the section entitled “Proposal No. 1—Approval of the Business Combination GSAH’s Board of Directors’ Reasons for the Approval of the Business Combination,” as well as in the sections entitled “Risk Factors— Risks Related to Vertiv’s Business.”

 

Q:

What will the Vertiv Stockholder receive in return for GSAH’s acquisition of all of the outstanding equity interests of Vertiv?

 

A:

As a result of and upon the consummation of the Business Combination, among other things, all outstanding equity interests of Vertiv Holdings will be cancelled in exchange for the right to receive the Merger Consideration. The Merger Consideration will be paid in a combination of cash and stock. The amount of

 

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  the Cash Consideration payable at the closing of the Business Combination to the Vertiv Stockholder is $415.0 million, subject to adjustment as described below. The remainder of the consideration paid at the closing of the Business Combination to the Vertiv Stockholder will be the Stock Consideration, consisting of approximately 127.5 million newly-issued shares of our Class A common stock, subject to adjustment as described below, which shares will be valued at $10.00 per share for purposes of determining the aggregate number of shares of our Class A common stock payable to the Vertiv Stockholder as part of the Merger Consideration. In addition, the Vertiv Stockholder may be entitled to receive additional merger consideration in the form of amounts payable under the Tax Receivable Agreement to be entered into at the closing of the Business Combination, substantially in the form attached as Annex F to this proxy statement. The number of shares of our Class A common stock issued to the Vertiv Stockholder as Stock Consideration is subject to adjustment, depending on, among other things, the level of redemptions of shares of Class A common stock by our public stockholders. For further details, see “Proposal No. 1—Approval of the Business Combination—The Merger Agreement.”

 

Q:

What equity stake will current stockholders of GSAH, PIPE Investors, including the Sponsor Related PIPE Investors, and the Subscribing Vertiv Executives and the Vertiv Stockholder hold in us after the closing?

 

A:

As of the date of this proxy statement, there are 86,250,000 shares of our common stock outstanding, which includes the 17,250,000 founder shares held by the Initial Stockholders and the 69,000,000 public shares. As of the date of this proxy statement, there is outstanding an aggregate of approximately 33.5 million warrants, which includes approximately 10.5 million private placement warrants held by the Sponsor and approximately 23.0 million public warrants. Each whole warrant entitles the holder thereof to purchase one share of our Class A common stock. Therefore, as of the date of this proxy statement (without giving effect to the Business Combination), our fully diluted share capital would be approximately 119.7 million.

It is anticipated that, upon completion of the Business Combination: (1) the Company’s public stockholders will own approximately 20% of our outstanding common stock; (2) the PIPE Investors (including the Sponsor Related PIPE Investors) and the Subscribing Vertiv Executives will own approximately 37% of our outstanding common stock; (3) the Sponsor and our other Initial Stockholders (as defined below) will own approximately 5% of our outstanding common stock; and (4) the Vertiv Stockholder will own approximately 38% of our outstanding common stock. These levels of ownership interest assume (a) that no shares are elected to be redeemed in connection with the Business Combination and (b) that we issue 127.5 million shares of common stock to the Vertiv Stockholder as part of the Merger Consideration in connection with the Merger Agreement. If the actual facts are different from these assumptions, the above levels of ownership interest will be different. In addition, the ownership percentage with respect to the post-business combination company (a) does not take into account (1) warrants to purchase Class A common stock that will remain outstanding immediately following the Business Combination or (2) the issuance of any shares upon completion of the Business Combination under the Incentive Plan, but (b) does include founder shares, which will automatically convert into shares of Class A common stock on a one-for-one basis upon the consummation of the Business Combination (such shares of Class A common stock will be subject to transfer restrictions).

 

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The following table illustrates varying ownership levels in us immediately following the consummation of the Business Combination based on the assumptions above, except for varying levels of additional redemptions by the public stockholders. If the actual facts are different from these assumptions, the above levels of ownership interest will be different.

 

     Share Ownership in the Company  
     No Redemptions     Maximum Redemptions(1)  
     Number of
Shares
(millions)
     Percentage of
Outstanding
Shares
    Number of
Shares
(millions)
     Percentage of
Outstanding
Shares
 

Vertiv Stockholder

     127.5        38     147.5        49

PIPE Investors and the Subscribing Vertiv Executives(2)

     123.9        37     123.9        41

Public Stockholders

     69.0        20     13.6        4

Initial Stockholders(3)

     17.3        5     17.3        6

 

(1)

Assumes that 55.4 million public shares (being our estimate of the maximum number of public shares that could be redeemed in connection with the Business Combination in order to satisfy the related Minimum Required Funds Condition contained in the Merger Agreement) are redeemed in connection with the Business Combination.

(2)

Includes 23 million shares subscribed for by the Sponsor Related PIPE Investors and 449,098 shares subscribed for by the Subscribing Vertiv Executives. See “Proposal No. 1—Approval of the Business Combination—Related Agreements—Subscription Agreements.”

(3)

Does not include any shares subscribed for by the Sponsor Related PIPE Investors in the PIPE Investment.

For more information, please see the sections entitled “Summary of the Proxy Statement—Sources and Uses of Funds for the Business Combination,” “Summary of the Proxy Statement— Ownership of the Company Following the Business Combination” and “Unaudited Pro Forma Condensed Combined Financial Information.”

 

Q:

What will happen in the Business Combination?

 

A:

The Merger Agreement provides for, among other things, (1) the merger of First Merger Sub with and into Vertiv Holdings, with Vertiv Holdings continuing as the surviving entity; and (2) immediately following the First Merger and as part of the same overall transaction as the First Merger, the merger of Vertiv Holdings with and into Second Merger Sub with Second Merger Sub continuing as the surviving entity, in each case, in accordance with the terms and subject to the conditions of the Merger Agreement as more fully described elsewhere in this proxy statement. Following the closing of the Business Combination, (a) the Company will own all the equity interests of Vertiv Holdings and (b) the Vertiv Stockholder, the sole equity owner of Vertiv Holdings prior to the Business Combination, will hold a portion of the Company’s Class A common stock. See the section entitled “Proposal No. 1—Approval of the Business Combination” for more detail.

 

Q:

Following the Business Combination, will the Company’s securities continue to trade on a stock exchange?

 

A:

Yes. We intend to apply to continue the listing of our Class A common stock, units and warrants on the NYSE under the symbols “VRT,” “VRT.U” and “VRT WS,” respectively, upon the closing of the Business Combination, though such securities may not be listed, for instance if there is not a sufficient number of round lot holders.

 

Q:

How has the announcement of the Business Combination affected the trading price of the Company’s Class A common stock?

 

A:

On December 9, 2019, the trading date before the public announcement of the Business Combination, GSAH’s public units, Class A common stock and warrants closed at $10.90, $10.45 and $1.4709,

 

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  respectively. On January 16, 2020, the most recent practicable date prior to the date of this proxy statement, the Company’s public units, Class A common stock and warrants closed at $12.48, $11.67 and $2.70, respectively.

 

Q:

How will the Business Combination impact the shares of the Company outstanding after the Business Combination?

 

A:

As a result of the Business Combination, including the PIPE Investment, the amount of shares of common stock outstanding will increase from 86,250,000 to approximately 337,650,000 (assuming that no public shares are redeemed). Additional shares of common stock may be issuable in the future as a result of the issuance of additional shares that are not currently outstanding, including: (1) issuance of shares of Class A common stock upon exercise of the public warrants and private placement warrants after the Business Combination and (2) pursuant to the Incentive Plan, a copy of which is attached to this proxy statement as Annex G. The issuance and sale of such shares could adversely impact the market price of our common stock, even if our business is doing well.

 

Q:

Is the Business Combination the first step in a “going private” transaction?

 

A:

No. The Company does not intend for the Business Combination to be the first step in a “going private” transaction. One of the primary purposes of the Business Combination is to provide a platform for Vertiv to access the U.S. public markets.

 

Q:

Will the management of Vertiv change in the Business Combination?

 

A:

We anticipate that all of the executive officers of Vertiv will remain with the post-business combination company. Additionally, David M. Cote, Rob Johnson, Jacob Kotzubei, Matthew Louie, Roger Fradin, Steven S. Reinemund, Joseph van Dokkum, Robin L. Washington and Edward L. Monser have each been nominated to serve as directors of the post-business combination company upon completion of the Business Combination. Please see the sections entitled “Proposal No. 4— Election of Directors to the Board of Director” and “Management After the Business Combination” for additional information.

 

Q:

Will the Company obtain new financing in connection with the Business Combination?

 

A:

Yes. The PIPE Investors and the Subscribing Vertiv Executives have agreed to purchase in the aggregate approximately 123,900,000 shares of Class A common stock, for approximately $1,239,000,000 of gross proceeds, in the PIPE Investment, a portion of which is expected to be funded by the Sponsor Related PIPE Investors. The PIPE Investment is contingent upon, among other things, stockholder approval of the Business Combination Proposal and the closing of the Business Combination. See “Proposal No. 1—Approval of the Business Combination—Related Agreements—Subscription Agreements.” In addition, the Company will be assuming approximately $2,411.3 million under the no redemption scenario and $2,061.1 million under the maximum redemption scenario of the existing net indebtedness of Vertiv. The Company does not currently anticipate obtaining any new debt financing to fund the Business Combination.

 

Q:

What conditions must be satisfied to complete the Business Combination?

 

A:

The Merger Agreement is subject to the satisfaction or waiver of certain customary closing conditions, including, among others, the Minimum Required Funds Condition, receipt of approvals from competition authorities in certain foreign jurisdictions (or expiration of applicable waiting periods in those jurisdictions), receipt of certain lender consents under Vertiv’s Existing Credit Agreements, the existence of no material adverse effect at the Company or Vertiv and receipt of certain stockholder approvals contemplated by this proxy statement. For more information about conditions to the consummation of the Business Combination, see “Proposal No. 1—Approval of the Business Combination—The Merger Agreement.”

 

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Q:

When do you expect the Business Combination to be completed?

 

A:

It is currently expected that the Business Combination will be consummated in the first quarter of 2020. This date depends, among other things, on the approval of the proposals to be put to GSAH’s stockholders at the Special Meeting and certain regulatory approvals. However, such meeting could be adjourned if the Adjournment Proposal is adopted by GSAH’s Stockholders at the Special Meeting and GSAH elects to adjourn the Special Meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event there are insufficient votes for, or for any other reason in connection with, the approval of one or more of the other proposals at the Special Meeting. For a description of the conditions for the completion of the Business Combination, see “Proposal No. 1—Approval of the Business Combination—The Merger Agreement.”

 

Q:

What happens if the Business Combination is not consummated?

 

A:

If GSAH is not able to complete the Business Combination with Vertiv by June 12, 2020 (or if such date is extended at a duly called meeting of stockholders, such later date) and is not able to complete another business combination by such date, GSAH will (1) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but no more than ten business days thereafter redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account including interest but less taxes payable (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of GSAH’s remaining stockholders and GSAH’s Board, dissolve and liquidate, subject in each case to GSAH’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.

 

Q:

How many votes do I have at the Special Meeting?

 

A:

Our stockholders are entitled to one vote on each proposal presented at the Special Meeting for each share of our common stock held of record as of January 16, 2020 the record date for the Special Meeting; provided that, pursuant to the GSAH Certificate of Incorporation, only holders of our Class B common stock have the right to vote on the election of directors at the Special Meeting. As of the close of business on the record date, there were 86,250,000 outstanding shares of our common stock.

 

Q:

Did GSAH’s Board obtain a third-party valuation or fairness opinion in determining whether or not to proceed with the Business Combination?

 

A:

No. Neither the GSAH Board nor any committee thereof is required to obtain an opinion from an independent investment banking or accounting firm that the price that we are paying for Vertiv is fair to us from a financial point of view. Neither the GSAH Board nor any committee thereof obtained a third party valuation in connection with the Business Combination. In analyzing the Business Combination, the GSAH Board conducted due diligence on Vertiv and reviewed comparisons of selected financial data of Vertiv with certain of its peers in the industry and the financial terms set forth in the Merger Agreement. Based on the foregoing, the GSAH Board concluded that the Business Combination was in the best interest of GSAH’s stockholders.

 

Q:

Do I have redemption rights?

 

A:

If you are a holder of public shares, you have the right to request that we redeem all or a portion of your public shares for cash provided that you follow the procedures and deadlines described elsewhere in this proxy statement. Public stockholders may elect to redeem all or a portion of the public shares held by them

 

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  regardless of if or how they vote in respect of the Business Combination Proposal or any other proposal set forth herein. If you wish to exercise your redemption rights, see the answer to the next question: “How do I exercise my redemption rights?

Notwithstanding the foregoing, a public stockholder, together with any affiliate of such public stockholder or any other person with whom such public stockholder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act), will be restricted from redeeming its public shares with respect to more than an aggregate of 15% of the public shares. Accordingly, if a public stockholder, alone or acting in concert or as a group, seeks to redeem more than 15% of the public shares, then any such shares in excess of that 15% limit would not be redeemed for cash. In addition, pursuant to the GSAH Certificate of Incorporation, in no event will we redeem public shares in an amount that would cause our net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) to be less than $5,000,001. In such case, we would not proceed with the redemption of our public shares and the Business Combination, and instead may search for an alternate initial business combination.

The Sponsor and each of our officer and directors have agreed to waive their redemption rights with respect to all of the shares of our common stock held by them in connection with the consummation of the Business Combination. The founder shares will be excluded from the pro rata calculation used to determine the per-share redemption price.

 

Q:

How do I exercise my redemption rights?

 

A:

If you are a public stockholder and wish to exercise your right to redeem the public shares, you must:

 

  (1)

(a) hold public shares, or (b) if you hold public shares through units, elect to separate your units into the underlying public shares and warrants prior to exercising your redemption rights with respect to the public shares;

 

  (2)

prior to 5:00 p.m. Eastern Time on February 4, 2020 (two business days before the scheduled date of the Special Meeting) submit a written request to Computershare Trust Company, N.A., our transfer agent, that we redeem all or a portion of your public shares for cash, affirmatively certifying in your request if you “ARE” or “ARE NOT” acting in concert or as a “group” (as defined in Section 13d-3 of the Exchange Act) with any other stockholder with respect to shares of our common stock at the following address:

 

By Registered & Overnight Mail:   By First Class Mail:

Computershare Trust Company, N.A.

Attn: Corporate Actions Voluntary Offer

150 Royall Street, Suite V

Canton, MA 02021

 

Computershare Trust Company, N.A.

Attn: Corporate Actions Voluntary Offer

P.O. Box 43011

Providence, RI 02940-3011

By Email: CorporateActionsUS@computershare.com

; and

 

  (3)

deliver your public shares either physically or electronically through the Deposit Withdrawal at Custodian (“DWAC”) system of The Depository Trust Company (“DTC”) to our transfer agent.

Notwithstanding the foregoing, a public stockholder, together with any affiliate of such public stockholder or any other person with whom such public stockholder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act), will be restricted from redeeming its public shares with respect to more than an aggregate of 15% of the public shares. Accordingly, if a public stockholder, alone or acting in concert or as a group, seeks to redeem more than 15% of the public shares, then any such shares in excess of that 15% limit would not be redeemed for cash.

Holders must complete the procedures for electing to redeem their public shares in the manner described above prior to 5:00 p.m., Eastern Time, on February 4, 2020 (two business days before the scheduled date of the Special Meeting) in order for their shares to be redeemed.

The address of our transfer agent is listed under the question “Who can help answer my questions?” below.

 

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Holders of units must elect to separate the units into the underlying public shares and warrants prior to exercising redemption rights with respect to the public shares. If holders hold their units through a broker, bank or other nominee, holders must notify their broker, bank or other nominee that they elect to separate the units into the underlying public shares and warrants, or if a holder holds units registered in its own name, the holder must contact the transfer agent directly and instruct it to do so.

Public stockholders will be entitled to request that their public shares be redeemed for a pro rata portion of the amount then on deposit in the trust account as of two business days prior to the consummation of the Business Combination including interest earned on the funds held in the trust account and not previously released to us (net of taxes payable). For illustrative purposes, as of January 15, 2020, this would have amounted to approximately $10.25 per outstanding public share. However, the proceeds deposited in the trust account could become subject to the claims of GSAH’s creditors, if any, which could have priority over the claims of the public stockholders. Therefore, the per share distribution from the trust account in such a situation may be less than originally expected due to such claims. Whether you vote, and if you do vote irrespective of how you vote, on any proposal, including the Business Combination Proposal, will have no impact on the amount you will receive upon exercise of your redemption rights. It is expected that the funds to be distributed to public stockholders electing to redeem their public shares will be distributed promptly after the consummation of the Business Combination.

Any request for redemption, once made by a holder of public shares, may be withdrawn at any time up to the deadline for exercising redemption requests (being two business days before the scheduled date of the Special Meeting) and thereafter, with our consent, until the consummation of the Business Combination. If you deliver your shares for redemption to our transfer agent, and later decide prior to such deadline not to elect redemption, you may request that our transfer agent return the shares (physically or electronically) to you. You may make such request by contacting our transfer agent at the phone number or address listed at the end of this section.

Any corrected or changed written exercise of redemption rights must be received by our transfer agent prior to the vote taken with respect to the Business Combination Proposal at the Special Meeting (or if we so elect, prior to the consummation of the Business Combination). No request for redemption will be honored unless the holder’s public shares have been delivered (either physically or electronically) to our transfer agent, at least two business days before the scheduled date of the Special Meeting.

If a holder of public shares properly makes a request for redemption and the public shares are delivered as described above, then, if the Business Combination is consummated, we will redeem the public shares for a pro rata portion of funds deposited in the trust account, calculated as of two business days prior to the consummation of the Business Combination, including interest (net of taxes payable).

If you are a holder of public shares and you exercise your redemption rights, such exercise will not result in the loss of any warrants that you may hold.

 

Q:

If I am a holder of units, can I exercise redemption rights with respect to my units?

 

A:

No. Holders of outstanding units must elect to separate the units into the underlying public shares and warrants prior to exercising redemption rights with respect to the public shares. If you hold your units through a broker, bank or other nominee, you must notify your broker, bank or other nominee that you elect to separate the units into the underlying public shares and warrants, or if you hold units registered in your own name, you must contact our transfer agent directly and instruct them to do so. You are requested to cause your public shares to be separated and delivered to our transfer agent, by 5:00 p.m., Eastern Time, on February 4, 2020 (two business days before the scheduled date of the Special Meeting) in order to exercise your redemption rights with respect to your public shares.

 

Q:

What are the U.S. federal income tax consequences of exercising my redemption rights?

 

A:

The U.S. federal income tax consequences to a stockholder exercising redemption rights will depend on the particular facts and circumstances. Please see the section entitled “Proposal No. 1—Approval of the

 

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  Business Combination—United States Federal Income Tax Considerations to Stockholders Exercising Redemption Rights.” We urge you to consult your tax advisors regarding the tax consequences of exercising your redemption rights.

 

Q:

Can the Sponsor or our officer and directors redeem their founder shares in connection with consummation of the Business Combination?

 

A:

No. The Sponsor and each of our officer and directors have agreed to waive their redemption rights with respect to all of the founder shares in connection with the consummation of the Business Combination. The founder shares will be excluded from the pro rata calculation used to determine the per-share redemption price.

 

Q:

Is there a limit on the number of shares I may redeem?

 

A:

Yes. A public stockholder, together with any affiliate of such public stockholder or any other person with whom such public stockholder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act), will be restricted from redeeming its public shares with respect to more than an aggregate of 15% of the public shares. Accordingly, if a public stockholder, alone or acting in concert or as a group, seeks to redeem more than 15% of the public shares, then any such shares in excess of that 15% limit would not be redeemed for cash. However, in no event is your ability to vote all of your shares (including those shares held by you or by a “group” in excess of 15% of the shares sold in our IPO) for or against our Business Combination restricted.

 

Q:

Is there a limit on the total number of shares that may be redeemed?

 

A:

Yes. Pursuant to the GSAH Certificate of Incorporation, in no event will we redeem public shares in an amount that would cause our net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) to be less than $5,000,001. In such case, we would not proceed with the redemption of our public shares and the Business Combination, and instead may search for an alternate initial business combination.

The Merger Agreement sets forth a Minimum Required Funds Condition, thereby limiting the maximum number of public shares that could be redeemed in connection with the Business Combination. If such condition is not met, and such condition is not or cannot be waived under the terms of the Merger Agreement, then the Merger Agreement could terminate and the proposed Business Combination may not be consummated. Based on the amount of $705,013,799 in the trust account as of September 30, 2019, including $1,093,609 of accrued dividends, and taking into account the anticipated gross proceeds of approximately $1,239,000,000 from the PIPE Investment, approximately 55.4 million public shares may be redeemed and still enable us to have sufficient cash to satisfy the cash closing conditions in the Merger Agreement. We refer to this as the “redemption scenario”.

 

Q:

Will how I vote affect my ability to exercise redemption rights?

 

A:

No. Stockholders may elect to redeem all or a portion of the public shares held by them regardless of if or how they vote in respect of the Business Combination Proposal or any other proposal set forth herein. As a result, the Merger Agreement can be approved by stockholders who will redeem their shares and no longer remain stockholders, leaving stockholders who choose not to redeem their shares holding shares in a company with a potentially less-liquid trading market, fewer stockholders, potentially less cash and the potential inability to meet the listing standards of the NYSE.

 

Q:

If I am a Company warrant holder, can I exercise redemption rights with respect to my warrants?

 

A:

No. The holders of our warrants have no redemption rights with respect to our warrants.

 

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Q:

Do I have appraisal rights in connection with the proposed Business Combination?

 

A:

No. Neither our stockholders nor our warrant holders have appraisal rights in connection with the Business Combination under the DGCL.

 

Q:

What happens to the funds deposited in the trust account after consummation of the Business Combination?

 

A:

Following the closing of the IPO, an amount equal to $690.0 million ($10.00 per unit) of the net proceeds from the IPO and the sale of the private placement warrants was placed in the trust account. As of September 30, 2019, funds in the trust account totaled $705,013,799, including $1,093,609 of accrued dividends. These funds will remain in the trust account, except for the withdrawal of interest to pay taxes, if any, until the earliest of (1) the completion of a business combination (including the closing of the Business Combination), (2) the redemption of any public shares properly tendered in connection with a stockholder vote to amend the GSAH Certificate of Incorporation to modify the substance or timing of GSAH’s obligation to redeem 100% of its public shares if it does not complete its initial business combination by June 12, 2020; and (3) the redemption of all of the public shares if GSAH is unable to complete its initial business combination by June 12, 2020 (or if such date is extended at a duly called meeting of stockholders, such later date), subject to applicable law.

Upon consummation of the Business Combination, the funds deposited in the trust account will be released to pay holders of our public shares who properly exercise their redemption rights; to pay a portion of the Cash Consideration and transaction fees and expenses associated with the Business Combination; and for working capital and general corporate purposes of the post-business combination company. See “Summary of the Proxy Statement—Sources and Uses of Funds for the Business Combination.”

 

Q:

What do I need to do now?

 

A:

You are urged to read this proxy statement, including the Annexes and the accompanying financial statements of the Company and Vertiv Holdings, carefully and in its entirety and to consider how the Business Combination will affect you as a stockholder or warrant holder. Our stockholders should then vote as soon as possible in accordance with the instructions provided in this proxy statement and on the enclosed proxy card.

 

Q:

How do I vote?

 

A:

If you are a holder of record of shares of our common stock on the record date for the Special Meeting, you may vote in person at the Special Meeting or by submitting a proxy for the Special Meeting. You may submit your proxy by completing, signing, dating and returning the enclosed proxy card in the accompanying pre-addressed postage-paid envelope. If you hold your shares in “street name,” which means your shares are held of record by a broker, bank or other nominee, you should contact your broker, bank or other nominee to ensure that votes related to the shares you beneficially own are properly counted. In this regard, you must provide the broker, bank or other nominee with instructions on how to vote your shares or, if you wish to attend the Special Meeting and vote in person, obtain a valid proxy from your broker, bank or other nominee.

 

Q:

If my shares are held in “street name,” will my broker, bank or other nominee automatically vote my shares for me?

 

A:

No. If your shares are held in a stock brokerage account or by a bank or other nominee, you are considered the “beneficial holder” of the shares held for you in what is known as “street name.” If this is the case, this proxy statement may have been forwarded to you by your broker, bank or other nominee, or its agent, and you may need to obtain a proxy form from the institution that holds your shares and follow the instructions

 

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  included on that form regarding how to instruct your broker, bank or other nominee as to how to vote your shares. Under the rules of various national and regional securities exchanges, your broker, bank or other nominee cannot vote your shares with respect to non-discretionary matters unless you provide instructions on how to vote in accordance with the information and procedures provided to you by your broker, bank or other nominee. We believe all of the proposals presented to our stockholders will be considered non-discretionary and therefore your broker, bank or other nominee will not vote your shares without your instruction. Your broker, bank or other nominee can vote your shares only if you provide instructions on how to vote. As the beneficial holder, you have the right to direct your broker, bank or other nominee as to how to vote your shares and you should instruct your broker, bank or other nominee to vote your shares in accordance with directions you provide. If you do not provide voting instructions to your broker, bank or other nominee on a particular proposal on which your broker, bank or other nominee does not have discretionary authority to vote, your shares will not be voted on that proposal. This is called a “broker non-vote.” An abstention will be counted towards the quorum requirement for each of the proposals presented at the Special Meeting but a broker non-vote will not. In connection with (i) the Business Combination Proposal and the Adjournment Proposal, abstentions and broker non-votes will have no effect, (ii) the NYSE Proposal and the Incentive Plan Proposal, abstentions will be counted as a vote cast at the Special Meeting and will have the same effect as a vote “AGAINST” the proposal but broker non-votes will have no effect and (iii) the Charter Proposal, abstentions and broker non-votes will have the same effect as voting “AGAINST” the proposal.

 

Q:

Who is entitled to vote at the Special Meeting?

 

A:

GSAH has fixed January 16, 2020 as the record date for the Special Meeting. If you were a stockholder of GSAH at the close of business on the record date, you are entitled to vote on matters that come before the Special Meeting; provided that, pursuant to the GSAH Certificate of Incorporation, only holders of our Class B common stock have the right to vote on the election of directors at the Special Meeting. However, a stockholder may only vote his, her or its shares if he, she or it is present in person or is represented by proxy at the Special Meeting.

 

Q:

What happens if I sell my shares of common stock before the Special Meeting?

 

A:

The record date for the Special Meeting is earlier than the date of the Special Meeting and earlier than the date that the Business Combination is expected to be completed. If you transfer your shares of common stock after the applicable record date, but before the Special Meeting, unless you grant a proxy to the transferee, you will retain your right to vote at the Special Meeting with respect to such shares but the transferee, and not you, will have the ability to redeem such shares (if time permits).

 

Q:

What constitutes a quorum at the Special Meeting?

 

A:

A majority of the outstanding shares of our common stock entitled to vote as of the record date at the Special Meeting must be present, in person or represented by proxy, at the Special Meeting to constitute a quorum and in order to conduct business at the Special Meeting. Abstentions will be counted as present for purposes of determining a quorum but broker non-votes will not. Our Initial Stockholders, who currently own approximately 20% of our outstanding shares of Common Stock, will count towards this quorum. In the absence of a quorum, the chairman of the Special Meeting has power to adjourn the Special Meeting. Based on the number of outstanding shares of our common stock as of the record date for the Special Meeting, 43,125,001 shares of our common stock will be required to achieve a quorum at the Special Meeting.

 

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Q:

What vote is required to approve each proposal at the Special Meeting?

 

A:

The following votes are required for each proposal at the Special Meeting:

 

   

Business Combination Proposal: The approval of the Business Combination Proposal requires the affirmative vote of a majority of the votes cast by holders of our outstanding shares of common stock represented in person or by proxy and entitled to vote thereon at the Special Meeting. Generally, only votes “FOR” or “AGAINST” are considered to be votes cast. Accordingly, a Company stockholder’s failure to vote by proxy or to vote in person at the Special Meeting, as well as an abstention from voting and a broker non-vote with regard to the Business Combination Proposal, will have no effect on the Business Combination Proposal. Abstentions will be counted in connection with the determination of whether a valid quorum is established but will have no effect on the Business Combination Proposal.

 

   

NYSE Proposal: The approval of the NYSE Proposal requires the affirmative vote of holders of a majority of the votes cast by holders of our outstanding shares of common stock represented in person or by proxy and entitled to vote thereon at the Special Meeting. A Company stockholder’s failure to vote by proxy or to vote in person at the Special Meeting and a broker non-vote with regard to the NYSE Proposal will have no effect on the NYSE Proposal. The NYSE considers abstentions to be votes cast and included in the number of shares of which a majority is required to vote in favor. Accordingly, abstentions will have the same effect as a vote “AGAINST” the NYSE Proposal.

 

   

Charter Proposals: The separate approval of each of the Charter Proposals requires the affirmative vote of holders of a majority of our outstanding shares of common stock entitled to vote thereon at the Special Meeting. Accordingly, a Company stockholder’s failure to vote by proxy or to vote in person at the Special Meeting, as well as an abstention from voting and a broker non-vote with regard to any of the Charter Proposals will have the same effect as a vote “AGAINST” such Charter Proposal.

 

   

Director Election Proposal: Pursuant to the GSAH Certificate of Incorporation, until the consummation of our initial business combination, only holders of our Class B common stock can elect or remove directors. Therefore, only holders of our Class B common stock will vote on the election of directors at the Special Meeting. Directors are elected by a plurality of all of the votes cast by holders of shares of our Class B common stock represented in person or by proxy and entitled to vote thereon at the Special Meeting. This means that the nine director nominees who receive the most affirmative votes will be elected. Stockholders may not cumulate their votes with respect to the election of directors. Assuming a valid quorum is established, abstentions and broker non-votes will have no effect on the election of directors.

 

   

Incentive Plan Proposal: The approval of the Incentive Plan Proposal requires the affirmative vote of a majority of the votes cast by holders of our outstanding shares of common stock represented in person or by proxy and entitled to vote thereon at the Special Meeting. A Company stockholder’s failure to vote by proxy or to vote in person at the Special Meeting and a broker non-vote with regard to the Incentive Plan Proposal will have no effect on the Incentive Plan Proposal. The NYSE considers abstentions to be votes cast and included in the number of shares of which a majority is required to vote in favor. Accordingly, abstentions will have the same effect as a vote “AGAINST” the Incentive Plan Proposal.

 

   

Adjournment Proposal: The approval of the Adjournment Proposal requires the affirmative vote of a majority of the votes cast by holders of our outstanding shares of common stock represented in person or by proxy and entitled to vote thereon at the Special Meeting. Generally, only votes “FOR” or “AGAINST” are considered to be votes cast. Accordingly, a Company stockholder’s failure to vote by proxy or to vote in person at the Special Meeting, as well as an abstention from voting and a broker non-vote will have no effect on the Adjournment Proposal. Abstentions will be counted in connection with the determination of whether a valid quorum is established but will have no effect on the Adjournment Proposal.

See “How does the Initial Stockholders intend to vote their shares?” for information on how the Initial Stockholders intend to vote their shares.

 

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Q:

What are the recommendations of GSAH’s Board?

 

A:

GSAH’s Board believes that the Business Combination Proposal and the other proposals to be presented at the Special Meeting are in the best interest of GSAH’s stockholders and unanimously recommends that its stockholders vote “FOR” the Business Combination Proposal, “FOR” the NYSE Proposal, “FOR” each of the separate Charter Proposals, “FOR” each of the director nominees set forth in the Director Election Proposal, “FOR” the Incentive Plan Proposal and “FOR” the Adjournment Proposal, in each case, if presented to the Special Meeting.

The existence of financial and personal interests of one or more of GSAH’s directors may result in a conflict of interest on the part of such director(s) between what he or they may believe is in the best interests of GSAH and its stockholders and what he or they may believe is best for himself or themselves in determining to recommend that stockholders vote for the proposals. See the section entitled “Proposal No. 1—Interests of GSAH’s Management Team in the Business Combination” for a further discussion of these considerations.

 

Q:

How do the Initial Stockholders intend to vote their shares?

 

A:

The Sponsor and each of our officer and directors have agreed to, among other things, vote in favor of the Business Combination Proposal and the other proposals described herein to be presented at the Special Meeting. As of the date of this proxy statement, the Initial Stockholders own approximately 20% of the outstanding shares of our common stock.

At any time at or prior to the Business Combination, subject to applicable securities laws (including with respect to material nonpublic information), the Sponsor, the Vertiv Stockholder or our or their respective directors, officers, advisors or respective affiliates may (1) purchase public shares from institutional and other investors who vote, or indicate an intention to vote, against any of the Condition Precedent Proposals, or elect to redeem, or indicate an intention to redeem, public shares, (2) execute agreements to purchase such shares from such investors in the future, or (3) enter into transactions with such investors and others to provide them with incentives to acquire public shares, vote their public shares in favor of the Condition Precedent Proposals or not redeem their public shares. Such a purchase may include a contractual acknowledgement that such stockholder, although still the record holder of GSAH’s shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. In the event that the Sponsor, the Vertiv Stockholder or our or their respective directors, officers, advisors or respective affiliates purchase shares in privately negotiated transactions from public stockholders who have already elected to exercise their redemption rights, such selling stockholder would be required to revoke their prior elections to redeem their shares. The purpose of such share purchases and other transactions would be to (1) increase the likelihood of approving the Condition Precedent Proposals and (2) limit the number of public shares electing to redeem, including to satisfy any redemption threshold.

Entering into any such arrangements may have an adverse effect on the market price of our common stock (e.g., by giving an investor or holder the ability to effectively purchase shares at a price lower than market, such investor or holder may therefore become more likely to sell the shares he or she owns, either at or prior to the Business Combination). If such transactions are effected, the consequence could be to cause the Business Combination to be consummated in circumstances where such consummation could not otherwise occur. Purchases of shares by the persons described above would allow them to exert more influence over the approval of the proposals to be presented at the Special Meeting and would likely increase the chances that such proposals would be approved. We will file or submit a Current Report on Form 8-K to disclose any material arrangements entered into or significant purchases made by any of the aforementioned persons that would affect the vote on the proposals to be put to the Special Meeting or the redemption threshold. Any such report will include descriptions of any arrangements entered into or significant purchases by any of the aforementioned persons.

 

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Q:

May I change my vote after I have mailed my signed proxy card?

 

A:

Yes. GSAH stockholders may send a later-dated, signed proxy card to GSAH’s Secretary at GSAH’s address set forth below so that it is received by GSAH’s Secretary prior to the vote at the Special Meeting (which is scheduled to take place on February 6, 2020) or attend the Special Meeting in person and vote. GSAH stockholders also may revoke their proxy by sending a notice of revocation to GSAH’s Secretary, which must be received by GSAH’s Secretary prior to the vote at the Special Meeting. However, if your shares are held in “street name” by your broker, bank or other nominee, you must contact your broker, bank or other nominee to change your vote.

 

Q:

If I am not going to attend the Special Meeting in person, should I return my proxy card instead?

 

A:

Yes. Whether you plan to attend the Special Meeting or not, please read the enclosed proxy statement carefully and in its entirety, and vote your shares by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided.

 

Q:

What will happen if I sign and return my proxy card without indicating how I wish to vote?

 

A:

If you sign and return your proxy card without indicating how you wish to vote, your proxy will be voted “FOR” each of the proposals presented at the Special Meeting.

 

Q:

What happens if I fail to take any action with respect to the Special Meeting?

 

A:

If you fail to take any action with respect to the Special Meeting and the Business Combination is approved by stockholders and the Business Combination is consummated, you will become a stockholder or warrant holder of the post-business combination company, as applicable. If you fail to take any action with respect to the Special Meeting and the Business Combination is not approved, you will remain a stockholder or warrant holder of GSAH, as applicable. However, if you fail to vote with respect to the Special Meeting, you will nonetheless be able to elect to redeem your public shares in connection with the Business Combination (if time permits).

 

Q:

What should I do with my stock certificates, warrant certificates or unit certificates?

 

A:

Our stockholders who exercise their redemption rights must deliver (either physically or electronically) their stock certificates to our transfer agent prior to the Special Meeting.

Holders must complete the procedures for electing to redeem their public shares in the manner described above prior to 5:00 p.m., Eastern Time, on February 4, 2020 (two business days before the scheduled date of the Special Meeting) in order for their shares to be redeemed.

Our warrant holders should not submit the certificates relating to their warrants. Public stockholders who do not elect to have their public shares redeemed for the pro rata share of the trust account should not submit the stock certificates relating to their public shares.

 

Q:

What should I do if I receive more than one set of voting materials?

 

A:

GSAH stockholders may receive more than one set of voting materials, including multiple copies of this proxy statement and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a holder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, sign, date and return each proxy card and voting instruction card that you receive in order to cast a vote with respect to all of your shares of our common stock.

 

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Q:

Who will solicit and pay the cost of soliciting proxies for the Special Meeting?

 

A:

We will pay the cost of soliciting proxies for the Special Meeting. GSAH has engaged Morrow Sodali LLC (“Morrow”) to assist in the solicitation of proxies for the Special Meeting. GSAH has agreed to pay Morrow a fee of $40,000, plus disbursements. GSAH will reimburse Morrow for reasonable out-of-pocket expenses and will indemnify Morrow and its affiliates against certain claims, liabilities, losses, damages and expenses. GSAH will also reimburse banks, brokers and other custodians, nominees and fiduciaries representing beneficial owners of our common stock for their expenses in forwarding soliciting materials to beneficial owners of our common stock and in obtaining voting instructions from those owners. GSAH’s management team may also solicit proxies by telephone, by facsimile, by mail, on the Internet or in person. They will not be paid any additional amounts for soliciting proxies.

 

Q:

Who can help answer my questions?

 

A:

If you have questions about the proposals or the Business Combination or if you need additional copies of the proxy statement or the enclosed proxy card, you should contact:

Morrow Sodali LLC

470 West Avenue

Stamford, Connecticut 06902

Individuals call toll-free: (800) 662-5200

Banks and Brokerage Firms, please call (203) 658-9400

Email: GSAH.info@investor.morrowsodali.com

You also may obtain additional information about GSAH from documents filed with the SEC by following the instructions in the section entitled “Where You Can Find More Information.” If you are a holder of public shares and you intend to seek redemption of your public shares, you will need to send a letter demanding redemption and deliver your public shares (either physically or electronically through DTC’s DWAC System) to Computershare Trust Company, N.A., our transfer agent, at the address below prior to the Special Meeting. Holders must complete the procedures for electing to redeem their public shares in the manner described above prior to 5:00 p.m., Eastern Time, on February 4, 2020 (two business days before the scheduled date of the Special Meeting) in order for their shares to be redeemed. If you have questions regarding the certification of your position or delivery of your stock, please contact Computershare Trust Company, N.A.:

 

By Registered & Overnight Mail:    By First Class Mail:
Computershare Trust Company, N.A.    Computershare Trust Company, N.A.
Attn: Corporate Actions Voluntary Offer    Attn: Corporate Actions Voluntary Offer
150 Royall Street, Suite V    P.O. Box 43011
Canton, MA 02021    Providence, RI 02940-3011

By Email: CorporateActionsUS@computershare.com

By Telephone: (781) 575-4858

 

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SUMMARY OF THE PROXY STATEMENT

This summary highlights selected information from this proxy statement and does not contain all of the information that is important to you. To better understand the proposals to be submitted for a vote at the Special Meeting, including the Business Combination, you should read this proxy statement, including the Annexes and the accompanying financial statements of the Company and Vertiv Holdings, carefully and in its entirety. The Merger Agreement, a copy of which is attached to this proxy statement as Annex A, is the primary legal document that governs the Business Combination and the other transactions that will be undertaken in connection with the Business Combination. The Merger Agreement is also described in detail in this proxy statement in the section entitled “Proposal No. 1—Approval of the Business Combination.”

Unless otherwise specified, all share calculations (1) assume that no shares are elected to be redeemed in connection with the Business Combination, (2) assume that we issue 127.5 million shares of common stock to the Vertiv Stockholder as part of the Merger Consideration in connection with the Merger Agreement, (3) do not take into account (a) warrants to purchase Class A common stock that will remain outstanding immediately following the Business Combination or (b) the issuance of any shares upon completion of the Business Combination under the Incentive Plan, and (4) include founder shares, which will automatically convert into shares of Class A common stock on a one-for-one basis upon the consummation of the Business Combination (such shares of Class A common stock will be subject to transfer restrictions). If the actual facts are different from these assumptions, the share calculations, including ownership interest of the post-business combination company, will be different.

Combined Business Summary

Unless the context otherwise requires, all references in this subsection to the “Company,” “we,” “us” or “our” refer to the business of Vertiv prior to the consummation of the Business Combination, which will be the business of the post-business combination company following the consummation of the Business Combination.

Who we are

Vertiv is a global leader in the design, manufacturing and servicing of critical digital infrastructure technology that powers, cools, deploys, secures and maintains electronics that process, store and transmit data. We provide this technology to data centers, communication networks and commercial & industrial environments worldwide.

We aim to help create a world where critical technologies always work, and where we empower the vital applications of the digital world.

Our business

We have a suite of comprehensive offerings, innovative solutions and a leading service organization that supports a diversified group of customers, which we deliver from engineering, manufacturing, sales and service locations in more than 45 countries across the Americas, Asia Pacific and Europe, the Middle East and Africa (“EMEA”). We provide the hardware, software and services to facilitate an increasingly interconnected marketplace of digital systems where large amounts of indispensable data need to be transmitted, analyzed, processed and stored. Whether this growing quantity of data is managed centrally in hyperscale/cloud locations, distributed at the so-called “edge” of the network, processed in an enterprise location or managed via a hybrid platform, the underpinnings and operations of all those locations rely on our critical digital infrastructure and services.



 

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We have a broad range of offerings, which include power management products, thermal management products, integrated rack systems, modular solutions, and management systems for monitoring and controlling digital infrastructure. These comprehensive offerings are integral to the technologies used for a number of services, including e-commerce, online banking, file sharing, video on-demand, energy storage, wireless communications, Internet of Things (“IoT”) and online gaming. In addition, through our global services network, we provide lifecycle management services, predictive analytics and professional services for deploying, maintaining and optimizing these products and their related systems.

Our primary customers are businesses across three main end markets: (1) data centers (including hyperscale/cloud, colocation, enterprise and edge), (2) communication networks and (3) commercial and industrial environments. Within these areas we serve a diverse array of industries, including social media, financial services, healthcare, transportation, retail, education and government. We approach these industries and end users through our global network of direct sales professionals, independent sales representatives, channel partners and original equipment manufacturers. Many of our installations are completed in collaboration with our customers and we work with them from the initial planning phase through delivery and servicing of the completed solution. This depth of interaction supports key customer relationships, sometimes spanning multiple decades. Our most prominent brands include Liebert, NetSure, Geist and Avocent.

Our business is organized into three segments according to our main geographic regions—the Americas, Asia Pacific and EMEA—and we manage and report our results of operations across these three business segments. For the nine months ended September 30, 2019, our revenue was $3,259.7 million, of which 51% was transacted in the Americas; 28% was transacted in Asia Pacific; and 21% was transacted in EMEA as compared with our revenue for the nine months ended September 30, 2018 of $3,114.0 million. For the year ended December 31, 2018, our revenue was $4,285.6 million, of which 50% was transacted in the Americas, 29% was transacted in Asia Pacific, and 21% was transacted in EMEA, and such revenue reflected an increase of $406.2 million, or 10.5%, as compared with our revenue for the year ended December 31, 2017 of $3,879.4 million. Approximately half of the increase was due to the acquisitions of Energy Labs and Geist. The remaining increases were primarily due to volume offset by purchase accounting adjustments from the valuation of acquired deferred revenue.

Our strengths

We are a customer-focused organization and have a host of strengths that allow us to act quickly and with agility to best serve our customers’ needs, including:

 

   

Stable platform for growth: We are well-positioned in the global marketplace as a key provider of critical digital infrastructure across several diverse areas, but with a uniform product set. We are able to provide multi-national customers with the ability to purchase and maintain a similar product set or technology in Asia as in the United States or the European Union and this focused approach to our served industries allows us to deploy capital and resources quickly and efficiently. In addition to our global building block approach to products, we also have a natural diversification that comes from serving various types of data center customers (including hyperscale/cloud, colocation, enterprise and edge locations), communication networks (including core and access sites) and commercial & industrial verticals (such as manufacturing and transportation). This diversification reduces our exposure to industry-specific market volatility and our geographical reach reduces our exposure to individual country or regional economic uncertainty. These factors help to stabilize our resilient business model.

 

   

Global service organization: Having a global service organization allows us to interface and support our customers in each phase of the product lifecycle. Our lifecycle services for our customers begin at the sales process for our products, continue through the installation and preventative maintenance of



 

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such products, and are maintained through a full suite of performance and predictive service applications which are utilized by our customers through the entire lifecycle of such products. Additionally, our service network acts as a global feedback mechanism, helping us improve our products, understand and address changing local/regional businesses and develop new technologies and solutions for our customers. The majority of our service revenue is derived from annuity-type contracts.

 

   

“Local Everywhere” capabilities: Our “local everywhere” approach to doing business helps us to address our customers’ region-specific needs as it promotes customer intimacy, improves our agility, increases our response times, and well-positions us to meet the varying local and regional requirements of our global customer base. As of September 30, 2019, we had sales support, engineering and manufacturing capabilities, as well as approximately 3,000 customer support employees (including over 2,700 field engineers and over 300 technical support representatives) strategically located across each of our three geographic segments of the Americas, Asia Pacific and EMEA, and a network of over 19,700 employees and significant facilities across the globe, which provide us with a wide capability to service our customers and help us understand our customers’ needs, which is fundamental to supporting long-term customer relationships.

 

   

Deep domain knowledge: As a result of our decades of experience in the industry, our customers have come to rely on our understanding of trends, underlying technologies, deployment types and the implementation of our offerings. Our ability to apply these insights to our customers’ utilization of our technology is a key differentiator as compared to our competitors within these same markets. Our decades of customer intimacy and numerous marketplace touch points with our customers, beginning at the start of the sales process and extending through the entire product life cycle, allow us to have deep technical discussions and solve vital customer problems.

 

   

Comprehensive integrated solutions: We offer specialized and comprehensive solutions by combining our leading products with third-party hardware. These solutions span standard configurations that can be placed in a technology closet at edge data centers, through configured-to-order solutions for medium-sized applications, up to custom-designed solutions to serve a data center colocation or hyperscale site. As the key provider of many of the components of this solution set, we differentiate ourselves from our competitors from both a supply chain and a technology perspective and become integrated in the customers’ core design planning.

 

   

Innovative mentality: Our business has been built on a track record of innovation. Over the decades, we have been instrumental in shaping the thermal and power management markets, consistently bringing forth new products, services and solutions to an ever growing customer base. Innovation occurs at all levels of our business and we dynamically adapt our offerings to help customers solve their key issues. We plan to continue to innovate across our products, services and industries in order to optimize our offerings for our customers.

 

   

Accomplished management team: Our management team is made up of industry professionals and transformational leaders with over 100 years of combined industry experience. Our Chief Executive Officer, Rob Johnson, has successfully led public companies in the past and has over 30 years of experience in the industry. The management team that supports Mr. Johnson is customer-focused, fast-acting, commercially savvy, digitally astute and promotes the core Vertiv values on a daily basis.

Industry

Global data center IP traffic is growing at a compounded annual growth rate (“CAGR”) of 21% from 2018 to 2021. This strong demand for data is being driven by businesses and consumers alike. The need for ubiquitous connectivity (being connected on any device, at anytime, anywhere) is a key driver of the markets we serve and



 

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is fueled by applications such as video on-demand, online banking, social media, IoT and digital health among others. All of this activity yields a continued growth in data processing, storage and networking as the world continues to become more reliant on the analysis and delivery of digital content.

Below is some key data that demonstrates this growth (graphics follow):

Data Boom: Key Driver of End-Market Growth

Increased Digitization, Multiple Device Connection Adoption, and IoT

 

 

LOGO



 

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LOGO



 

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Our primary customers are businesses across three main end markets: (1) data centers (including hyperscale/cloud, colocation, enterprise and edge), (2) communication networks and (3) commercial and industrial environments.

Data centers: The primary purpose of a data center is to process, store and distribute data. There are a host of different sizes and types of data centers, but primarily they can be broken down into the following classifications:

 

   

Cloud/Hyperscale: These facilities are massive in scale and are primarily used to support off-premise cloud applications. This portion of the industry is growing rapidly. Examples of companies in this space include Microsoft Azure, Amazon Web Services and Google Cloud.

 

   

Colocation: These facilities range in size and offer users a location where they can place their IT equipment, while the building and critical digital infrastructure is owned by the colocation company. This portion of the industry is growing rapidly. Examples of companies in this space include Digital Realty and Equinix.

 

   

Enterprise: This classification refers to the “Fortune 1000” type businesses that have their own on-premises data centers. Examples of companies in this space include Goldman Sachs, J.P. Morgan, Walmart and Cleveland Clinic. The enterprise segment represents approximately 70% of the data center business. We have found that the growth of the enterprise market, based on data centers and square footage, has generally been flat for the past three years.

 

   

Edge: These types of data centers are at the infancy stage of their development and will be utilized by all of the aforementioned categories in the future. These locations are decentralized by nature and located closer to where the data is being demanded (i.e., towards the edge of the network). This market is small today, but the opportunities for growth in this space are expected to increase as the proliferation of connected devices and data storage needs continue to grow in the future.

Our management estimates that approximately 70% of our revenues for the fiscal year ended December 31, 2018 are attributable to customers across the data center end market.

Communication networks: This space is comprised of wireline, wireless and broadband companies. These companies create content and are ultimately responsible for distributing voice, video and data to businesses and consumers. They deliver this data through an intricate network of wireline and wireless mediums. Additionally, some of these companies’ locations act as data centers where the data is delivered and also processed and stored. This sector has a generally low single digit growth profile. Our management estimates that approximately 20% of our revenues for the fiscal year ended December 31, 2018 are attributable to customers across the communication networks end market.

Commercial/Industrial: This space is comprised of those applications that are tied to a company’s critical systems. Examples include transportation, manufacturing, oil and gas, etc. These applications are growing in their need for intelligent infrastructure and may be regulated or need to pass some level of compliance. The growth in this area generally tracks Growth Domestic Product. Our management estimates that approximately 10% of our revenues for the fiscal year ended December 31, 2018 are attributable to customers across the commercial and industrial end market.

Our strategy

We strive to create value for our stockholders through organic growth and strategic acquisitions, lean initiatives to cut costs and the hiring and retaining of top talent. We believe the culture and values being instilled in the organization (such as acting with speed, transparency and focus on the customer) propel us to deliver value for all of our constituents.



 

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Our goal is to enable the vital applications of the digital world by anticipating and solving the needs of our customers in this increasingly connected global landscape. We expect to continue achieving growth and creating value through several strategic initiatives:

 

   

Customer centricity: Everything we do starts with the customer. Understanding our customers’ markets, needs and strategies enables significant and earlier engagement with such customers during the selling cycle. We have multiple touch points with customers through a product’s life cycle, which positions our organization to best address our customers’ critical application needs. This customer focused strategy aligns every team in our organization, from sales to engineering to supply chain.

 

   

Leadership in technology: Vertiv is on the forefront of technological development within our core businesses of critical digital infrastructure. We innovate at the individual product level in order to increase efficiency, reduce our product’s carbon footprint and enhance ease of use for our customers. Two examples of this technology leadership are our new eXL S1 power product and our DSE thermal product. Both of these offerings are leading products in the market from an efficiency, footprint and ease-of-use standpoint. Further, we are developing smart technology and continue to build an ecosystem that allows for interconnectivity between our products, our services and our customers. Additionally, our investment in data analytics and software will allow us and our customers to be smarter and more predictive around the critical digital infrastructure. In order to maintain our technology leadership, we will continue to invest in premier engineering talent and invest in developing next-gen cutting-edge technology.

 

   

Acquisition pipeline: We have in the past pursued, and intend in the future to pursue, acquisitions that will enhance and diversify our portfolio of offerings and capabilities. Given our existing diversified platform, we are able to target companies across a range of competencies and verticals. We will look for companies that: (1) increase our presence in the hyperscale/cloud, colocation and edge universe; (2) bolster our service and solutions platform; and (3) help leverage our technologies in adjacent markets such as energy storage. For example, our recent acquisitions of Geist, a leading manufacturer of rack power distribution units, and Energy Labs, a leading provider of direct and indirect air handling systems and modular data center solutions, will help to expand our hyperscale/cloud and colocation offerings, increase our solutions capabilities, and provide further edge offerings for our customers.

 

   

Continue to optimize our operational model and cost structure: We have in the past pursued, and intend in the future to pursue, opportunities to improve our operations and eliminate redundant and unnecessary costs. For example, we continue to build out the Vertiv Operating System to transform the business and deliver value to the customer. This system is rooted in always putting the customer first, building an outstanding culture, and maintaining an intense focus on continuously improving. The tools we utilize allow for lean implementation, better on-time delivery, direct and indirect supply chain saving and productivity improvements.

 

   

Grow and expand in key customers: Our key customer program focuses on those global and regional accounts that we believe most benefit from our value proposition. Many of these accounts are large cloud or colocation customers, as well as communication networks and vertical customers. We look to further expand our presence and opportunities with these clients as we believe their growth trajectories will outpace the traditional market growth.

 

   

Continue building a customer centered culture: We believe that in order to maintain our strong customer relationships, we must have a deeply customer centric culture; exhibit accountability; and act with speed and purpose in addressing customer needs.



 

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Parties to the Business Combination

The Company

GS Acquisition Holdings Corp is a blank check company incorporated as a Delaware corporation on April 25, 2016, and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. GSAH has neither engaged in any operations nor generated any operating revenue to date. Based on GSAH’s business activities, it is a “shell company” as defined under the Exchange Act because it has no operations and nominal assets consisting almost entirely of cash.

On June 12, 2018, GSAH completed its IPO of 69,000,000 units, including 9,000,000 units issued pursuant to the exercise by the underwriters of their option to purchase additional units in full, at a price of $10.00 per unit, generating proceeds to us of $690,000,000 before underwriting discounts and expenses. Each unit consisted of one share of Class A common stock and one-third of one redeemable warrant, with each whole warrant exercisable for one share of Class A common stock at a price of $11.50 per share. Simultaneously with the closing of the IPO, GSAH closed the private placement of an aggregate of 10,533,333 warrants, each exercisable to purchase one share of Class A common stock at an exercise price of $11.50 per share, to the Sponsor, at a price of $1.50 per private placement warrant, generating proceeds of $15,800,000. Each warrant sold in the IPO and the private placement will become exercisable 30 days after the completion of our initial business combination, and will expire at 5:00 p.m., New York City time, five years after the completion of our initial business combination or earlier upon redemption or liquidation. Subject to the terms and conditions contained in the warrant agreement, the warrants may be redeemed either for cash once they become exercisable or for shares of Class A common stock commencing 90 days after they become exercisable.

On the closing date of the IPO, GSAH placed $690,000,000 of proceeds (including $24,150,000 of deferred underwriting discount) from the IPO and the sale of the private placement warrants into the trust account and held $2,000,000 (net of offering expenses, other than underwriting discounts, paid upon the consummation of the IPO) of such proceeds outside the trust account. The proceeds held in the trust account may only be invested in United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act having a maturity of 180 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations. These funds will remain in the trust account, except for the withdrawal of interest to pay taxes, if any, until the earliest of (1) the completion of a business combination (including the closing of the Business Combination), (2) the redemption of any public shares properly tendered in connection with a stockholder vote to amend the GSAH Certificate of Incorporation to modify the substance or timing of GSAH’s obligation to redeem 100% of its public shares if it does not complete its initial business combination by June 12, 2020; and (3) the redemption of all of the public shares if GSAH is unable to complete its initial business combination by June 12, 2020 (or if such date is extended at a duly called meeting of stockholders, such later date), subject to applicable law.

GSAH’s publicly-traded Class A common stock, units and warrants are currently listed on the NYSE under the symbols “GSAH,” “GSAH.U” and “GSAH WS,” respectively. We intend to apply to continue the listing of our Class A common stock, units and warrants on the NYSE under the symbols “VRT,” “VRT.U” and “VRT WS,” respectively, upon the closing of the Business Combination, though such securities may not be listed, for instance if there is not a sufficient number of round lot holders.

GSAH’s principal executive office is located at 200 West Street, New York, New York 10282 and its telephone number is (212) 902-1000. GSAH’s corporate website address is www.GSacquisition.com. GSAH’s website and the information contained on, or that can be accessed through, the website is not deemed to be incorporated by reference in, and is not considered part of, this proxy statement.



 

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Vertiv Holdings, LLC

Vertiv Holdings, LLC, is a Delaware limited liability company and the indirect parent of Vertiv Group. Vertiv Holdings is the direct parent of Vertiv Holding Corporation. Vertiv Holding Corporation is the direct parent of Vertiv Holdco. Vertiv Holdco is the direct parent of Vertiv Group Intermediate. Vertiv Group Intermediate is the direct parent of Vertiv Group. Vertiv Group is the principal operating company of the Vertiv business, which was previously the Network Power business owned by Emerson Electric Co.

Vertiv Holdings does not conduct any material operations other than its direct ownership of Vertiv Holding Corporation and indirect ownership of Vertiv Group.

The principal executive office of Vertiv Holdings is located at 1050 Dearborn Drive, Worthington, Ohio 43085.

Vertiv Stockholder

VPE Holdings, LLC is a Delaware limited liability company formed in December, 2019, for the purpose of entering into the Business Combination. The Vertiv Stockholder is the holder of all of the outstanding membership interests of Vertiv Holdings.

The principal executive office of the Vertiv Stockholder is located at 360 N. Crescent Drive, South Bldg., Beverly Hills, California, 90210.

First Merger Sub and Second Merger Sub

First Merger Sub and Second Merger Sub are each direct wholly owned subsidiaries of GSAH, each formed as a Delaware limited liability company in December, 2019. Neither First Merger Sub nor Second Merger Sub owns any material assets or operates any business.

The principal executive office of each of First Merger Sub and Second Merger Sub is located at 200 West Street, New York, New York 10282.

Proposals to be Put to the Stockholders of GSAH at the Special Meeting

The following is a summary of the proposals to be put to GSAH stockholders at the Special Meeting and certain transactions contemplated by the Merger Agreement. Each of the proposals below, except the Adjournment Proposal, is cross-conditioned on the approval of each other. The Adjournment Proposal is not conditioned upon the approval of any other proposal set forth in this proxy statement. The transactions contemplated by the Merger Agreement will be consummated only if the Condition Precedent Proposals are approved at the Special Meeting.

Business Combination Proposal

As discussed in this proxy statement, we are asking our stockholders to approve and adopt the Merger Agreement, dated as of December 10, 2019, by and among GSAH, Vertiv Holdings, the Vertiv Stockholder, First Merger Sub and Second Merger Sub, a copy of which is attached to this proxy statement as Annex A. The Merger Agreement provides for, among other things, (1) the merger of First Merger Sub with and into Vertiv Holdings, with Vertiv Holdings continuing as the surviving entity; and (2) immediately following the First Merger and as part of the same overall transaction as the First Merger, the merger of Vertiv Holdings with and into Second Merger Sub with Second Merger Sub continuing as the surviving entity, in each case, in accordance



 

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with the terms and subject to the conditions of the Merger Agreement as more fully described elsewhere in this proxy statement. Following the closing of the Business Combination, (a) the Company will own all the equity interests of Vertiv Holdings and (b) the Vertiv Stockholder, the sole equity owner of Vertiv Holdings prior to the Business Combination, will hold a portion of the Company’s Class A common stock. Our Board concluded that the Business Combination met all of the requirements disclosed in the prospectus for our IPO, including that the Vertiv business had a fair market value equal to at least 80% of the net assets held in trust (net of amounts disbursed to management for working capital purposes and excluding the amount of any deferred underwriting discount held in trust). For more information about the transactions contemplated by the Merger Agreement, see “Proposal No. 1—Approval of the Business Combination.”

Merger Consideration

As a result of and upon the consummation of the Business Combination, among other things, all outstanding equity interests of Vertiv will be cancelled in exchange for the right to receive the Merger Consideration. The Merger Consideration will be paid in a combination of cash and stock. The amount of the Cash Consideration payable to the Vertiv Stockholder at the closing of the Business Combination is $415.0 million, subject to adjustment as described below. The remainder of the consideration paid to the Vertiv Stockholder at the closing of the Business Combination will be the Stock Consideration, consisting of approximately 127.5 million newly-issued shares of our Class A common stock, subject to adjustment as described below, which shares will be valued at $10.00 per share for purposes of determining the aggregate number of shares of our Class A common stock payable to the Vertiv Stockholder as part of the Aggregate Consideration. In addition, the Vertiv Stockholder may be entitled to receive additional merger consideration in the form of amounts payable under the Tax Receivable Agreement to be entered into at the closing of the Business Combination, substantially in the form attached as Annex F to this proxy statement. The number of shares of our Class A common stock issued to the Vertiv Stockholder as Stock Consideration is subject to adjustment, depending on, among other things, the level of redemptions of shares of Class A common stock by our public stockholders. For further details, see “Proposal No. 1—Approval of the Business Combination—The Merger Agreement.”

Closing Conditions

Consummation of the transactions contemplated by the Merger Agreement is subject to customary closing conditions, including, among others, the Minimum Required Funds Condition, receipt of approvals from competition authorities in certain foreign jurisdictions (or expiration of applicable waiting periods in those jurisdictions), receipt of certain lender consents under Vertiv’s Existing Credit Agreements, the existence of no material adverse effect at the Company or Vertiv and receipt of certain stockholder approvals contemplated by this proxy statement. These conditions to closing in the Merger Agreement are for the sole benefit of the parties thereto and may be waived by such parties. There can be no assurance that the parties to the Merger Agreement would waive any such provision of the Merger Agreement. For more information about the closing conditions to the Business Combination, please see the section entitled “Proposal No. 1—Approval of the Business Combination—The Merger Agreement—Conditions to Closing of the Business Combination.”

NYSE Proposal

Assuming the Business Combination Proposal is approved, our stockholders will also be asked to consider and approve, for purposes of complying with applicable listing rules of the NYSE, the issuance of more than 20% of the Company’s outstanding common stock in connection with the Business Combination and the PIPE Investment, including up to 23 million shares of our Class A common stock to the Sponsor Related PIPE Investors and up to 449,098 shares of our Class A common stock to the Subscribing Vertiv Executives. For further details, see “Proposal No. 2—Approval of the Issuance of More than 20% of the Company’s Outstanding Common Stock in Connection with the Business Combination.



 

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Charter Proposals

Assuming the Business Combination Proposal and the NYSE Proposal are approved, our stockholders will also be asked to consider and act upon six separate proposals relating to adopting the New Vertiv Certificate of Incorporation in the form attached hereto as Annex B, which, if approved, would take effect upon the closing of the Business Combination. For further details, see “Proposal No. 3—Approval of the Second Amended and Restated Certificate of Incorporation.

Director Election Proposal

Assuming the Business Combination Proposal, the NYSE Proposal and each of the Charter Proposals are approved, the holders of our Class B common stock will also be asked to consider and vote upon a proposal to elect nine directors to serve, effective upon the closing of the Business Combination, with each director on our Board having a term that expires at the post-business combination company’s annual meeting of stockholders in 2021, and until their respective successors are duly elected and qualified, or until their earlier resignation, removal or death. For further details, see “Proposal No. 4—Election of Directors to the Board of Directors.

Incentive Plan Proposal

Assuming the Business Combination Proposal, the NYSE Proposal, each of the Charter Proposals and the Director Election Proposal are approved, our stockholders will also be asked to consider and vote upon a proposal to approve the Incentive Plan, including the authorization of the initial share reserve under the Incentive Plan. For further details, see “Proposal No. 5—Approval of the Incentive Plan, Including the Authorization of the Initial Share Reserve Under the Incentive Plan.

Adjournment Proposal

Our Board may ask our stockholders to consider and vote upon a proposal to approve the adjournment of the Special Meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or for any other reason in connection with, the approval of one or more of the other proposals at the Special Meeting. For further details, see “Proposal No. 6—Adjournment Proposal.”

GSAH’s Board’s Reasons for the Business Combination

GSAH was organized for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses.

In evaluating the Business Combination, our Board considered a number of factors. In particular, our Board considered, among other things, the following factors, although not weighted or in any order of significance:

 

   

Vertiv’s Highly Attractive Business Model. Vertiv is a global leader in the design, manufacturing and servicing of critical digital infrastructure technology, offering a broad range of products, which include power management products, thermal management products, integrated rack systems, modular solutions, and management systems for monitoring and controlling digital infrastructure. Vertiv has developed a focused portfolio of product and service solutions, targeted towards high growth end markets, with 70% of revenues for the fiscal year ended December 31, 2018 attributable to the rapidly growing data center end market. Further, Vertiv’s broad customer base, across the data center, communication network and commercial & industrial verticals, combined with its broad geographic reach, provides the potential for a resilient business model.

 

   

Vertiv’s Deep Relationships with a Diverse Customer Base. Vertiv has a highly diversified customer base, with the top 50 customers representing approximately 35% of total net sales for the fiscal year



 

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ended December 31, 2018. These customers span a wide array of industries and verticals, including the data center, communication network and commercial & industrial verticals, with many of Vertiv’s key customer relationships spanning multiple decades.

 

   

Vertiv’s Strong Recurring Revenue. Vertiv has high recurring revenue in part due to the lifecycle of services it provides for its customers, with the customer relationship spanning from the initial sales process to installation and preventative maintenance of Vertiv’s products to product replacement and/or capacity expansion. This lifecycle of services, and the high level of recurring revenue generated by it, should provide further stability to Vertiv’s business model.

 

   

Vertiv’s Experienced and Proven Management Team. The Board considered the fact that, post-Business Combination, Vertiv will be led by a senior management team that has over 100 years of combined industry experience and a proven track record of operational excellence and financial performance at Vertiv. In addition, the Board considered the fact that Mr. Cote, with his significant leadership experience and extensive management and investment experience, including in the industrial sector, would serve as Executive Chairman of the post-Business Combination Vertiv.

 

   

Vertiv’s Strong Balance Sheet. The Board’s considered the fact that the Business Combination will provide significant primary capital and financial flexibility for Vertiv to pursue value-additive growth opportunities. Vertiv’s strong initial balance sheet combined with its financial performance and access to the public markets through the Business Combination should enable Vertiv to expedite its growth strategy through both organic growth and strategic acquisitions.

 

   

Other Alternatives. The Board’s belief, after a thorough review of other business combination opportunities reasonably available to the Company, that the proposed Business Combination represents the best potential business combination for the Company based upon the process utilized to evaluate and assess other potential acquisition targets.

 

   

Terms of the Merger Agreement. The Board considered the terms and conditions of the Merger Agreement and the transactions contemplated thereby, including the Business Combination.

 

   

Continued Ownership By Sellers. The Board considered that the Vertiv Stockholder would be receiving a significant amount of Vertiv common stock as part of its consideration and would be the largest stockholder of Vertiv following the Business Combination. The Board considered this a strong sign of the Vertiv Stockholder’s confidence in Vertiv and the benefits to be realized as a result of the Business Combination.

 

   

The Role of the Independent Directors. The Board is comprised of a majority of independent directors who are not affiliated with our Sponsor and its affiliates, including Goldman Sachs. In connection with the Business Combination, our independent directors, Messrs. James Albaugh, Roger Fradin and Steven S. Reinemund, evaluated the proposed terms of the Business Combination, including the Merger Agreement, the Related Agreements and the amendments to our current certificate of incorporation to take effect upon the completion of the Business Combination. Our independent directors evaluated and unanimously approved, as members of the Board, the Merger Agreement and the transactions contemplated therein, including the Business Combination.

For a more complete description of our Board’s reasons for approving the Business Combination, including other factors, uncertainties and risks considered by our Board, see “Proposal No. 1—GSAH’s Board of Directors’ Reasons for the Approval of the Business Combination.”

Related Agreements

This section describes certain additional agreements entered into or to be entered into pursuant to the Merger Agreement. For additional information, see “Proposal No. 1—Related Agreements.”



 

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Amended and Restated Registration Rights Agreement

At the closing of the Business Combination, the Company will enter into the Amended and Restated Registration Rights Agreement, substantially in the form attached as Annex D to this proxy statement, with GSAH’s independent directors, GS Sponsor LLC, Cote SPAC 1 LLC, the Sponsor Related PIPE Investors and the Vertiv Stockholder (collectively, with each other person who has executed and delivered a joinder thereto, the “RRA Parties”), pursuant to which the RRA Parties will be entitled to registration rights in respect of certain shares of the Company’s Class A common stock and certain other equity securities of the Company that are held by the RRA Parties from time to time. For more information about the Amended and Restated Registration Rights Agreement, please see the section entitled “Proposal No. 1—Approval of the Business Combination—Related Agreements—Amended and Restated Registration Rights Agreement.”

Stockholders Agreement

At the closing of the Business Combination, the Company, the Sponsor and the Vertiv Stockholder will enter into the Stockholders Agreement, substantially in the form attached as Annex E to this proxy statement. Pursuant to the Stockholders Agreement, the Vertiv Stockholder will have the right to nominate up to four directors to the post-closing company’s Board of Directors, subject to its ownership percentage of the total outstanding shares of Class A common stock. For more information about the Stockholders Agreement, please see the section entitled “Proposal No. 1—Approval of the Business Combination—Related Agreements—Stockholders Agreement.”

Tax Receivable Agreement

At the closing of the Business Combination, we will enter into the Tax Receivable Agreement, substantially in the form attached as Annex F to this proxy statement, with the Vertiv Stockholder. The Tax Receivable Agreement will generally provide for the payment by us to the Vertiv Stockholder of 65% of the cash tax savings realized (or deemed realized) in periods after the closing of the Business Combination as a result of certain pre-existing tax assets and attributes of Vertiv. We expect to retain the benefit of the remaining 35% of these cash tax savings. For more information about the Tax Receivable Agreement, please see the section entitled “Proposal No. 1—Approval of the Business Combination—Related Agreements—Tax Receivable Agreement.”

Escrow Agreement

At the closing of the Business Combination, the Company, the Vertiv Stockholder and CITIBANK, N.A. (the “Escrow Agent”) will enter into the Escrow Agreement, substantially in the form attached as Annex I to this proxy statement. Pursuant to the Escrow Agreement, at closing, the Company will deposit $2,000,000 into an account held by the Escrow Agent as partial security for the obligations of the Vertiv Holdings in connection with the post-closing adjustment to the merger consideration (as described in more detail in the Merger Agreement). The Escrow Agent will hold such amount until the final merger consideration is finally agreed upon by the parties to the Escrow Agreement, at which point it will release the funds in accordance with joint written instructions duly executed and delivered by the Company and the Vertiv Stockholder to the Escrow Agent.

Subscription Agreements

On December 10, 2019, the Company entered into the Subscription Agreements with the PIPE Investors and the Subscribing Vertiv Executives, pursuant to which the PIPE Investors and the Subscribing Vertiv Executives have agreed to purchase an aggregate of 123,900,000 shares of Class A common stock in a private placement for a price of $10.00 per share for an aggregate commitment of approximately $1,239,000,000. The Subscription Agreements are subject to certain conditions, including the closing of the Business Combination. For more



 

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information about the Subscription Agreements, please see the section entitled “Proposal No. 1—Approval of the Business Combination—Related Agreements—Subscription Agreements” and “Certain Relationships and Related Persons Transactions—GSAH’s Related Party Transactions—Management Subscription.”

Ownership of the Company Following the Business Combination

As of the date of this proxy statement, there are 86,250,000 shares of our common stock outstanding, which includes the 17,250,000 founder shares held by the Initial Stockholders and the 69,000,000 public shares. As of the date of this proxy statement, there is outstanding an aggregate of approximately 33.5 million warrants, which includes the 10.5 million private placement warrants held by the Sponsor and approximately 23.0 million public warrants. Each whole warrant entitles the holder thereof to purchase one share of our Class A common stock. Therefore, as of the date of this proxy statement (without giving effect to the Business Combination), our fully diluted share capital would be approximately 119.7 million.

It is anticipated that, upon completion of the Business Combination: (1) the Company’s public stockholders will own approximately 20% of our outstanding common stock; (2) the PIPE Investors (including the Sponsor Related PIPE Investors) and the Subscribing Vertiv Executives will own approximately 37% of our outstanding common stock; (3) the Sponsor and our other Initial Stockholders will own approximately 5% of our outstanding common stock; and (4) the Vertiv Stockholder will own approximately 38% of our outstanding common stock. These levels of ownership interest assume (a) that no shares are elected to be redeemed in connection with the Business Combination and (b) that we issue 127.5 million shares of common stock to the Vertiv Stockholder as part of the Merger Consideration in connection with the Merger Agreement. If the actual facts are different from these assumptions, the above levels of ownership interest will be different. In addition, the ownership percentage with respect to the post-business combination company (a) does not take into account (1) warrants to purchase Class A common stock that will remain outstanding immediately following the Business Combination or (2) the issuance of any shares upon completion of the Business Combination under the Incentive Plan, but (b) does include founder shares, which will automatically convert into shares of Class A common stock on a one-for-one basis upon the consummation of the Business Combination (such shares of Class A common stock will be subject to transfer restrictions).

The following table illustrates varying ownership levels in us immediately following the consummation of the Business Combination based on the assumptions above, except for varying levels of additional redemptions by the public stockholders. If the actual facts are different from these assumptions, the above levels of ownership interest will be different.

 

     Share Ownership in the Company  
     No Redemptions     Maximum Redemptions(1)  
     Number of
Shares
(millions)
     Percentage of
Outstanding
Shares
    Number of
Shares
(millions)
     Percentage of
Outstanding
Shares
 

Vertiv Stockholder

     127.5        38     147.5        49

PIPE Investors and the Subscribing Vertiv Executives(2)

     123.9        37     123.9        41

Public Stockholders

     69.0        20     13.6        4

Initial Stockholders(3)

     17.3        5     17.3        6


 

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(1)

Assumes that 55.4 million public shares (being our estimate of the maximum number of public shares that could be redeemed in connection with the Business Combination in order to satisfy the related Minimum Required Funds Condition contained in the Merger Agreement) are redeemed in connection with the Business Combination.

(2)

Includes 23 million shares subscribed for by the Sponsor Related PIPE Investors and 449,098 shares subscribed for by the Subscribing Vertiv Executives. See “Proposal No. 1—Approval of the Business Combination—Related Agreements—Subscription Agreements.”

(3)

Does not include any shares subscribed for by the Sponsor Related PIPE Investors in the PIPE Investment.

For more information, please see the sections entitled “—Ownership of the Company Following the Business Combination” and “Unaudited Pro Forma Condensed Combined Financial Information.”

Date, Time and Place of the Special Meeting of GSAH’s Stockholders

The Special Meeting will be held on February 6, 2020 at 11:00 a.m. Pacific Time at the offices of Goldman Sachs, located at Fox Plaza, 2121 Avenue of the Stars, Suite 2600, Los Angeles, CA 90067, or at such other time, on such other date and at such other place to which the meeting may be adjourned or postponed.

Voting Power; Record Date

GSAH stockholders will be entitled to vote or direct votes to be cast at the Special Meeting if they owned shares of Common Stock at the close of business on January 16, 2020 which is the “record date” for the Special Meeting. Stockholders are entitled to one vote on each proposal presented at the Special Meeting for each share of our common stock held of record as of January 16, 2020 the record date for the Special Meeting; provided that, pursuant to the GSAH Certificate of Incorporation, only holders of our Class B common stock have the right to vote on the election of directors at the Special Meeting. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker, bank or other nominee to ensure that votes related to the shares you beneficially own are properly counted. GSAH’s warrants do not have voting rights with respect to the proposals to be presented at the Special Meeting. As of the close of business on the record date, there were 86,250,000 outstanding shares of our common stock.

Quorum and Required Vote for proposals at the Special Meeting

A majority of the outstanding shares of our common stock entitled to vote as of the record date at the Special Meeting must be present, in person or represented by proxy, at the Special Meeting to constitute a quorum and in order to conduct business at the Special Meeting. Abstentions will be counted as present for the purpose of determining a quorum but a broker non-vote will not. Our Initial Stockholders, who currently own approximately 20% of our outstanding shares of Common Stock, will count towards this quorum. In the absence of a quorum, the chairman of the Special Meeting has power to adjourn the Special Meeting. Based on the number of outstanding shares of our common stock as of the record date for the Special Meeting, 43,125,001 shares of our common stock will be required to achieve a quorum at the Special Meeting.

The Sponsor and each of our officer and directors have agreed to, among other things, vote in favor of the Business Combination Proposal and the other proposals described herein to be presented at the Special Meeting. As of the date of this proxy statement, the Initial Stockholders own approximately 20% of the outstanding shares of our common stock.

The proposals presented at the Special Meeting require the following votes:

 

   

Business Combination Proposal: The approval of the Business Combination Proposal requires the affirmative vote of a majority of the votes cast by holders of our outstanding shares of common stock



 

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represented in person or by proxy and entitled to vote thereon at the Special Meeting. Generally, only votes “FOR” or “AGAINST” are considered to be votes cast. Accordingly, a Company stockholder’s failure to vote by proxy or to vote in person at the Special Meeting, as well as an abstention from voting and a broker non-vote with regard to the Business Combination Proposal will have no effect on the Business Combination Proposal. Abstentions will be counted in connection with the determination of whether a valid quorum is established but will have no effect on the Business Combination Proposal.

 

   

NYSE Proposal: The approval of the NYSE Proposal requires the affirmative vote of holders of a majority of the votes cast by holders of our outstanding shares of common stock represented in person or by proxy and entitled to vote thereon at the Special Meeting. A Company stockholder’s failure to vote by proxy or to vote in person at the Special Meeting and a broker non-vote with regard to the NYSE Proposal will have no effect on the NYSE Proposal. The NYSE considers abstentions to be votes cast and included in the number of shares of which a majority is required to vote in favor. Accordingly, abstentions will have the same effect as a vote “AGAINST” the NYSE Proposal.

 

   

Charter Proposals: The separate approval of each of the Charter Proposals requires the affirmative vote of holders of a majority of our outstanding shares of common stock entitled to vote thereon at the Special Meeting. Accordingly, a Company stockholder’s failure to vote by proxy or to vote in person at the Special Meeting, as well as an abstention from voting and a broker non-vote with regard to any of the Charter Proposals will have the same effect as a vote “AGAINST” such Charter Proposal.

 

   

Director Election Proposal: Pursuant to the GSAH Certificate of Incorporation, until the consummation of our initial business combination, only holders of our Class B common stock can elect or remove directors. Therefore, only holders of our Class B common stock will vote on the election of directors at the Special Meeting. Directors are elected by a plurality of all of the votes cast by holders of shares of our Class B common stock represented in person or by proxy and entitled to vote thereon at the Special Meeting. This means that the nine director nominees who receive the most affirmative votes will be elected. Stockholders may not cumulate their votes with respect to the election of directors. Assuming a valid quorum is established, abstentions and broker non-votes will have no effect on the election of directors.

 

   

Incentive Plan Proposal: The approval of the Incentive Plan Proposal requires the affirmative vote of a majority of the votes cast by holders of our outstanding shares of common stock represented in person or by proxy and entitled to vote thereon at the Special Meeting. A Company stockholder’s failure to vote by proxy or to vote in person at the Special Meeting and a broker non-vote with regard to the Incentive Plan Proposal will have no effect on the Incentive Plan Proposal. The NYSE considers abstentions to be votes cast and included in the number of shares of which a majority is required to vote in favor. Accordingly, abstentions will have the same effect as a vote “AGAINST” the Incentive Plan Proposal.

 

   

Adjournment Proposal: The approval of the Adjournment Proposal requires the affirmative vote of a majority of the votes cast by holders of our outstanding shares of common stock represented in person or by proxy and entitled to vote thereon at the Special Meeting. Generally, only votes “FOR” or “AGAINST” are considered to be votes cast. Accordingly, a Company stockholder’s failure to vote by proxy or to vote in person at the Special Meeting, as well as an abstention from voting and a broker non-vote will have no effect on the Adjournment Proposal. Abstentions will be counted in connection with the determination of whether a valid quorum is established but will have no effect on the Adjournment Proposal.



 

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Redemption Rights

Pursuant to the GSAH Certificate of Incorporation, a public stockholder may request that we redeem all or a portion of its public shares for cash if the Business Combination is consummated. As a holder of public shares, you will be entitled to receive cash for any public shares to be redeemed only if you:

 

  (1)

(a) hold public shares, or (b) if you hold public shares through units, elect to separate your units into the underlying public shares and warrants prior to exercising your redemption rights with respect to the public shares;

 

  (2)

prior to 5:00 p.m. Eastern Time on February 4, 2020 (two business days before the scheduled date of the Special Meeting) submit a written request to Computershare Trust Company, N.A., our transfer agent, that we redeem all or a portion of your public shares for cash, affirmatively certifying in your request if you “ARE” or “ARE NOT” acting in concert or as a “group” (as defined in Section 13d-3 of the Exchange Act) with any other stockholder with respect to shares of our common stock at the following address:

 

By Registered & Overnight Mail:   By First Class Mail:

Computershare Trust Company, N.A.

Attn: Corporate Actions Voluntary Offer

150 Royall Street, Suite V

Canton, MA 02021

 

Computershare Trust Company, N.A.

Attn: Corporate Actions Voluntary Offer

P.O. Box 43011

Providence, RI 02940-3011

By Email: CorporateActionsUS@computershare.com

; and

 

  (3)

deliver your public shares either physically or electronically through DTC’s DWAC system to our transfer agent.

Holders must complete the procedures for electing to redeem their public shares in the manner described above prior to 5:00 p.m., Eastern Time, on February 4, 2020 (two business days before the scheduled date of the Special Meeting) in order for their shares to be redeemed.

Holders of units must elect to separate the units into the underlying public shares and warrants prior to exercising redemption rights with respect to the public shares. If holders hold their units through a broker, bank or other nominee, holders must notify their broker, bank or other nominee that they elect to separate the units into the underlying public shares and warrants, or if a holder holds units registered in its own name, the holder must contact the transfer agent directly and instruct it to do so. Public stockholders may elect to redeem their public shares even if they vote “for” the Business Combination Proposal or any other proposal. If the Business Combination is not consummated, the public shares will be returned to the respective holder, broker, bank or other nominee. If the Business Combination is consummated, and if a public stockholder properly exercises its right to redeem all or a portion of the public shares that it holds, including timely delivering its shares to our transfer agent, we will redeem such public shares for a per-share price, payable in cash, equal to the pro rata portion of the trust account, calculated as of two business days prior to the consummation of the Business Combination, including interest (net of taxes payable). For illustrative purposes, as of January 15, 2020, this would have amounted to approximately $10.25 per outstanding public share. If a public stockholder properly exercises its redemption rights in full, then it will be electing to exchange all of its public shares for cash and will not own any public shares of the post-business combination company. See “Special Meeting of GSAH Stockholders—Redemption Rights” in this proxy statement for a detailed description of the procedures to be followed if you wish to redeem your public shares for cash.

Notwithstanding the foregoing, a public stockholder, together with any affiliate of such public stockholder or any other person with whom such public stockholder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act), will be restricted from redeeming its public shares with respect to more than an aggregate of 15% of the public shares. Accordingly, if a public stockholder, alone or acting in concert or as a group, seeks to redeem more than 15% of the public shares, then any such shares in excess of that 15% limit



 

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would not be redeemed for cash. In addition, pursuant to the GSAH Certificate of Incorporation, in no event will we redeem public shares in an amount that would cause our net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) to be less than $5,000,001. In such case, we would not proceed with the redemption of our public shares and the Business Combination, and instead may search for an alternate initial business combination.

The Sponsor and each of our officer and directors have agreed to, among other things, vote in favor of the Business Combination Proposal and the other proposals described herein to be presented at the Special Meeting. As of the date of this proxy statement, the Initial Stockholders own approximately 20% of the outstanding shares of our common stock.

Holders of our outstanding warrants do not have redemption rights in connection with the Business Combination.

Appraisal Rights

Neither our stockholders nor our warrant holders have appraisal rights in connection with the Business Combination under the DGCL.

Proxy Solicitation

Proxies may be solicited by mail, telephone or in person. GSAH has engaged Morrow Sodali LLC to assist in the solicitation of proxies.

If a stockholder grants a proxy, it may still vote its shares in person if it revokes its proxy before the Special Meeting. A stockholder also may change its vote by submitting a later-dated proxy as described in the section entitled “Questions and Answers—May I change my vote after I have mailed my signed proxy card?

Interests of GSAH’s Management Team in the Business Combination

When you consider the recommendation of our Board in favor of approval of the Business Combination Proposal and the other proposals included herein, you should keep in mind that the Sponsor and our directors have interests in such proposal that are different from, or in addition to, those of our stockholders and warrant holders generally. Our Board was aware of and considered these interests, among other matters, in evaluating and negotiating the Business Combination and transaction agreements and in recommending to our stockholders that they vote in favor of the proposals presented at the Special Meeting, including the Business Combination Proposal. GSAH stockholders should take these interests into account in deciding whether to approve the proposals presented at the Special Meeting, including the Business Combination Proposal. These interests include, among other things:

 

   

If we do not consummate a business combination by June 12, 2020 (or if such date is extended at a duly called meeting of our stockholders, such later date), we would (1) cease all operations except for the purpose of winding up; (2) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (which interest shall be net of taxes payable, and less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any); and (3) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our Board, dissolve and liquidate, subject in each case to our obligations under Delaware law to



 

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provide for claims of creditors and the requirements of other applicable law. In such event, the 17,250,000 shares of Class B common stock owned by our Initial Stockholders, including the Sponsor, would be worthless because following the redemption of the public shares, we would likely have few, if any, net assets and because the Sponsor and each of our officer and directors have agreed to waive their rights to liquidating distributions from the trust account with respect to such shares if we fail to complete a business combination within the required period. Additionally, in such event, the 10,533,333 private placement warrants that the Sponsor paid $15.8 million for will expire worthless. Certain of our directors, including David M. Cote, have a direct or indirect economic interest in such shares and private placement warrants. The 17,250,000 shares of Class A common stock that the Initial Stockholders will hold following the Business Combination, if unrestricted and freely tradable, would have had aggregate market value of approximately $201.3 million based upon the closing price of $11.67 per share of Class A common stock on the NYSE on January 16, 2020, the most recent practicable date prior to the date of this proxy statement. Given such shares of our common stock will be subject to certain restrictions, we believe such shares have less value. The 10,533,333 private placement warrants that the Sponsor will hold following the Business Combination, if unrestricted and freely tradable, would have had an aggregate market value of approximately $28.4 million based upon the closing price of $2.70 per warrant on the NYSE on January 16, 2020, the most recent practicable date prior to the date of this proxy statement.

 

   

David M. Cote, our Chief Executive Officer, President and Secretary, and Chairman of our Board, is expected to be the Executive Chairman of our Board after the consummation of the Business Combination. Roger Fradin and Steven S. Reinemund, both of whom are our directors, are expected to be on our Board after consummation of the Business Combination. As such, in the future, Mr. Cote, Mr. Fradin and Mr. Reinemund will receive any cash fees, stock options, stock awards or other remuneration that our Board determines to pay to them.

 

   

Our existing management team members will be eligible for continued indemnification and continued coverage under a directors’ and officers’ liability insurance policy after the Mergers and pursuant to the Merger Agreement.

 

   

In order to protect the amounts held in the trust account, the Sponsor has agreed that it will be liable to us if and to the extent any claims by a third party (other than our independent registered public accounting firm) for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amount of funds in the trust account to below: (1) $10.00 per public share; or (2) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account due to reductions in the value of the trust assets, in each case, net of the interest which may be withdrawn to pay taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the trust account and except as to any claims under our indemnity of the underwriters of our IPO against certain liabilities, including liabilities under the Securities Act.

 

   

Upon completion of the Business Combination, an aggregate amount of approximately $50 million in deferred underwriting discount, advisory fees and placement agent fees, will be payable to Goldman Sachs & Co. LLC, an affiliate of us and the Sponsor. Additionally, Raanan A. Agus is a Participating Managing Director of Goldman Sachs and one of our directors.

 

   

Affiliates of Goldman Sachs are lenders to Vertiv under the Term Loan Facility and Asset-Based Revolving Credit Facility, with an aggregate of approximately $23.5 million and approximately $16.3 million outstanding to such affiliates in the Term Loan Facility and the Asset-Based Revolving Credit Facility, respectively, as of the date of this proxy statement. We intend to use a portion of the proceeds from the Business Combination, including the PIPE Investment, to repay a portion of the outstanding Term Loan Facility and, as a result, such affiliates would receive their pro rata portion of



 

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such proceeds. In addition, as of the date of this proxy statement, affiliates of Goldman Sachs hold an aggregate of approximately $180,000 of the Existing Notes.

 

   

The Sponsor Related PIPE Investors have subscribed for $230 million of the PIPE Investment, for which they will receive up to 23 million shares of our Class A common stock. See “Certain Relationships and Related Persons Transactions—GSAH’s Related Party Transactions—Subscription Agreements.”

 

   

Pursuant to the Amended and Restated Registration Rights Agreement, our Initial Stockholders, the Sponsor Related PIPE Investors and the Vertiv Stockholder will have customary registration rights, including demand and piggy-back rights, subject to cooperation and cut-back provisions with respect to the shares of Class A common stock and warrants held by such parties.

 

   

The New Vertiv Certificate of Incorporation will contain a provision that expressly elects not to be governed by Section 203 (Delaware’s “interested stockholder” statute) of the Delaware General Corporation Law.

The Sponsor and each of our officer and directors have agreed to, among other things, vote in favor of the Business Combination Proposal and the other proposals described herein to be presented at the Special Meeting. As of the date of this proxy statement, the Initial Stockholders own approximately 20% of the outstanding shares of our common stock.

At any time at or prior to the Business Combination, subject to applicable securities laws (including with respect to material nonpublic information), the Sponsor, the Vertiv Stockholder or our or their respective directors, officers, advisors or respective affiliates may (1) purchase public shares from institutional and other investors who vote, or indicate an intention to vote, against any of the Condition Precedent Proposals, or elect to redeem, or indicate an intention to redeem, public shares, (2) execute agreements to purchase such shares from such investors in the future, or (3) enter into transactions with such investors and others to provide them with incentives to acquire public shares, vote their public shares in favor of the Condition Precedent Proposals or not redeem their public shares. Such a purchase may include a contractual acknowledgement that such stockholder, although still the record holder of GSAH’s shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. In the event that the Sponsor, the Vertiv Stockholder or our or their respective directors, officers, advisors or respective affiliates purchase shares in privately negotiated transactions from public stockholders who have already elected to exercise their redemption rights, such selling stockholder would be required to revoke their prior elections to redeem their shares. The purpose of such share purchases and other transactions would be to (1) increase the likelihood of approving the Condition Precedent Proposals and (2) limit the number of public shares electing to redeem, including to satisfy any redemption threshold.

Entering into any such arrangements may have a depressive effect on our common stock (e.g., by giving an investor or holder the ability to effectively purchase shares at a price lower than market, such investor or holder may therefore become more likely to sell the shares he or she owns, either at or prior to the Business Combination). If such transactions are effected, the consequence could be to cause the Business Combination to be consummated in circumstances where such consummation could not otherwise occur. Purchases of shares by the persons described above would allow them to exert more influence over the approval of the proposals to be presented at the Special Meeting and would likely increase the chances that such proposals would be approved. We will file or submit a Current Report on Form 8-K to disclose any material arrangements entered into or significant purchases made by any of the aforementioned persons that would affect the vote on the proposals to be put to the Special Meeting or the redemption threshold. Any such report will include descriptions of any arrangements entered into or significant purchases by any of the aforementioned persons.

The existence of financial and personal interests of one or more of GSAH’s directors may result in a conflict of interest on the part of such director(s) between what he or they may believe is in the best interests of GSAH



 

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and its stockholders and what he or they may believe is best for himself or themselves in determining to recommend that stockholders vote for the proposals. See “Proposal No. 1—Interests of GSAH’s Management Team in the Business Combination” for a further discussion of these considerations.

Recommendation to Stockholders of GSAH

GSAH’s Board of Directors believes that the Business Combination Proposal and the other proposals to be presented at the Special Meeting are in the best interest of GSAH’s stockholders and unanimously recommends that its stockholders vote “FOR” the Business Combination Proposal, “FOR” the NYSE Proposal, “FOR” each of the separate Charter Proposals, “FOR” each nominee in the Director Election Proposal, “FOR” the Incentive Plan Proposal and “FOR” the Adjournment Proposal, in each case, if presented to the Special Meeting.

The existence of financial and personal interests of one or more of GSAH’s directors may result in a conflict of interest on the part of such director(s) between what he or they may believe is in the best interests of GSAH and its stockholders and what he or they may believe is best for himself or themselves in determining to recommend that stockholders vote for the proposals. See the section entitled “Proposal No. 1—Interests of GSAH’s Management Team in the Business Combination” for a further discussion of these considerations.

Sources and Uses of Funds for the Business Combination

The following tables summarize the sources and uses for funding the Business Combination assuming a September 30, 2019 closing date, and assume that (i) no public stockholders exercise their redemption rights in connection with the Business Combination and (ii) 55.4 million public shares (being our estimate of the maximum number of public shares that could be redeemed in connection with the Business Combination in order to satisfy the related Minimum Required Funds Condition contained in the Merger Agreement) are redeemed in connection with the Business Combination.

 

(in millions)

   Assuming
no
redemptions
     Assuming
maximum
redemptions
 

Sources:

     

Cash inflow from PIPE Investment(1)

   $ 1,239.0      $ 1,239.0  

Cash inflow from Company’s Trust Account(2)

     705.0        705.0  
  

 

 

    

 

 

 

Cash inflow from business combination

     1,944.0        1,944.0  

Uses:

     

Paydown of Vertiv debt(3)

     1,479.0        1,113.0  

Payment to selling equityholders(4)

     415.0        215.0  

Payment to redeeming Company stockholders(5)

     —          566.0  

Payment of Company expenses(6)

     50.0        50.0  
  

 

 

    

 

 

 

Cash outflow from business combination

     1,944.0        1,944.0  
  

 

 

    

 

 

 

Net pro forma cash flow

   $ —        $ —    

 

(1)

Represents the issuance of 123.9 million shares of Class A common stock through the PIPE Investment at a par value of $0.0001 per share and an assumed fair value of $10.00 per share.

(2)

Reflects the reclassification of cash equivalents held in the trust account inclusive of accrued dividends and to reflect that the cash equivalents are available to effectuate the Business Combination or to pay redeeming public stockholders.

(3)

Reflects the cash prepayment of the Term Loan Facility principal amount from $2,070.0 to $591.0 under the no redemption scenario and from $2,070.0 to $957.0 under the maximum redemption scenario, respectively.



 

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(4)

Reflects the net cash consideration paid to or on behalf of the Vertiv Stockholder. Under the terms of the Merger Agreement, this amount will be contingent upon, amongst other items, the amount of funds from the trust account that will be used to pay redeeming public stockholders.

(5)

Reflects the maximum payment that could be made to redeeming Company stockholders which would leave sufficient cash to satisfy the Minimum Required Funds Condition. The maximum amount of redemptions assumed is 55.4 million shares at a price of $10.00 per share plus the redeeming shares’ pro rata allocation of the accrued dividends.

(6)

Represents the payment of deferred underwriter fees of $24.2 and an estimated $25.8 acquisition-related transaction costs. Acquisition-related transaction costs and related charges are not included as a component of consideration to be transferred but are required to be charged against the proceeds from the PIPE Investment and the trust account. The unaudited pro forma condensed balance sheet reflects these costs as a reduction of cash with a corresponding decrease to Additional paid in capital.

U.S. Federal Income Tax Considerations

The U.S. federal income tax consequences to a stockholder exercising redemption rights will depend on the particular facts and circumstances. Please see the section entitled “Proposal No. 1—Approval of the Business Combination—United States Federal Income Tax Considerations to Stockholders Exercising Redemption Rights.” We urge you to consult your tax advisors regarding the tax consequences of exercising your redemption rights.

Expected Accounting Treatment

The Business Combination will be accounted for as a reverse recapitalization in conformity with GAAP. Under this method of accounting, GSAH has been treated as the “acquired” company for financial reporting purposes. This determination was primarily based on evaluation of the following facts and circumstances under both the minimum and maximum redemptions scenarios:

 

   

The Vertiv Stockholder will designate four out of nine board members. The Vertiv Stockholder and the Sponsor will mutually approve the designation of three other board members. The Vertiv Stockholder will continue to nominate four board members under the Stockholders Agreement for as long as the Vertiv Stockholder holds more than 30% equity ownership of the combined company.

 

   

The Vertiv Stockholder will hold the largest share of voting interests under both the no redemption and maximum redemption scenarios described herein with 37.8% and 48.8%, respectively.

 

   

The ongoing senior management of the post-business combination company will be entirely comprised of Vertiv employees.

 

   

Vertiv comprises all of the operating activities of the post-business combination company.

Accordingly, for accounting purposes, net assets of the post-business combination company will be stated at historical cost, with no goodwill or other intangible assets recorded.

Regulatory Matters

Under the HSR Act and the rules that have been promulgated thereunder by the U.S. Federal Trade Commission (the “FTC”), certain transactions may not be consummated unless information has been furnished to the Antitrust Division of the Department of Justice (“Antitrust Division”) and the FTC and certain waiting period requirements have been satisfied. The Business Combination is subject to these requirements and may not be completed until the expiration of a 30-day waiting period following the filing of the required Notification and Report Forms with the Antitrust Division and the FTC or until early termination is granted. On December 20,



 

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2019, the Company and Vertiv Holdings filed the required forms under the HSR Act with respect to the Business Combination with the Antitrust Division and the FTC and requested early termination. On January 3, 2020, both the Company and Vertiv Holdings received notice that early termination had been granted.

Additionally, under applicable antitrust laws in certain foreign jurisdictions, certain transactions may not be consummated until approval or expiration of the applicable waiting periods. The Business Combination is subject to these requirements and may not be completed until such approvals are obtained or the applicable waiting periods have expired.

At any time before or after consummation of the Business Combination, notwithstanding termination of the waiting period under the HSR Act, the applicable competition authorities could take such action under applicable antitrust laws as each deems necessary or desirable in the public interest, including seeking to enjoin the consummation of the Business Combination. Private parties may also seek to take legal action under the antitrust laws under certain circumstances. Even though early termination under the HSR Act has been granted, we cannot assure you that the Antitrust Division, the FTC, any state attorney general, or any other government authority will not attempt to challenge the Business Combination on antitrust grounds, and, if such a challenge is made, we cannot assure you as to its result. Neither the Company nor Vertiv Holdings is aware of any material regulatory approvals or actions that are required for completion of the Business Combination other than the expiration or early termination of the waiting period under the HSR Act. It is presently contemplated that if any such additional regulatory approvals or actions are required, those approvals or actions will be sought. There can be no assurance, however, that any additional approvals or actions will be obtained.

Emerging Growth Company

GSAH is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act, and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in GSAH’s periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

Further, section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. GSAH has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, GSAH, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of GSAH’s financial statements with certain other public companies difficult or impossible because of the potential differences in accounting standards used.

We will remain an emerging growth company until the earlier of: (1) the last day of the fiscal year (a) following the fifth anniversary of the closing of the IPO, (b) in which we have total annual gross revenue of at least $1.07 billion or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common equity that is held by non-affiliates exceeds $700 million as of the prior June 30th; and (2) the date on which we have issued more than $1.00 billion in non-convertible debt securities during the prior three-year period. If the Business Combination is consummated, we currently anticipate losing our “emerging growth



 

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company” status at 2020 year end. References herein to “emerging growth company” shall have the meaning associated with it in the JOBS Act.

Risk Factors

In evaluating the proposals to be presented at the Special Meeting, a stockholder should carefully read this proxy statement and especially consider the factors discussed in the section entitled “Risk Factors.”



 

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SELECTED HISTORICAL FINANCIAL INFORMATION OF GSAH

GSAH is providing the following selected historical financial information to assist you in your analysis of the financial aspects of the Business Combination.

GSAH’s balance sheet data as of December 31, 2018 and 2017 and statement of operations data for the fiscal years ended December 31, 2018 and 2017 are derived from GSAH’s audited financial statements included elsewhere in this proxy statement. GSAH’s balance sheet data as of September 30, 2019 and statement of operations data for the nine months ended September 30, 2019 and 2018 are derived from GSAH’s unaudited financial statements included elsewhere in this proxy statement.



 

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The information is only a summary and should be read in conjunction with GSAH’s financial statements and related notes and “GSAH’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained elsewhere in this proxy statement. GSAH’s historical results are not necessarily indicative of future results, and the results for any interim period are not necessarily indicative of the results that may be expected for a full fiscal year.

 

    September 30, 2019
(Unaudited)
    December 31,
2018
    December 31,
2017
 

ASSETS

     

Current assets:

     

Cash

  $ 194,528     $ 835,544     $ —  

Prepaid expenses

    353,813       341,424       —    

Receivable from GS Sponsor LLC

    —         —         25,000  
 

 

 

   

 

 

   

 

 

 

Total current assets

    548,341       1,176,968       25,000  

Cash and cash equivalents held in Trust Account

    703,920,190       694,883,137       —    

Accrued dividends receivable held in Trust Account

    1,093,609       1,278,946       —    
 

 

 

   

 

 

   

 

 

 

Total assets

  $ 705,562,140     $ 697,339,051     $ 25,000  
 

 

 

   

 

 

   

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

     

Current liabilities:

     

Accounts payable

  $ 1,234,290     $ 644,208     $ 1,276  

Accrued offering costs

    —         538,881       —    

Income tax payable

    214       94,439       —    
 

 

 

   

 

 

   

 

 

 

Total current liabilities

    1,234,504       1,277,528       1,276  

Deferred underwriting compensation

    24,150,000       24,150,000       —    
 

 

 

   

 

 

   

 

 

 

Total liabilities

    25,384,504       25,427,528       1,276  
 

 

 

   

 

 

   

 

 

 

Commitments and contingencies

     

Class A common stock subject to possible redemption; 66,079,922 and 66,100,835 shares, at redemption value at September 30, 2019 and December 31, 2018, respectively

    675,177,635       666,911,522       —    

Stockholders’ equity:

     

Preferred stock, $0.0001 par value, 5,000,000 shares authorized, none issued and outstanding

    —         —         —    

Class A common stock, $0.0001 par value, 500,000,000 shares authorized, 2,920,078 and 2,899,165 shares issued and outstanding (excluding 66,079,922 and 66,100,835 shares subject to possible redemption), at September 30, 2019 and December 31, 2018, respectively

    292       290       —    

Class B common stock, $0.0001 par value, 20,000,000 shares authorized, 17,250,000 issued and outstanding

    1,725       1,725       1,725  

Additional paid-in capital

    —         271,932       326,693  

Retained earnings (Accumulated deficit)

    4,997,984       4,726,054       (304,694
 

 

 

   

 

 

   

 

 

 

Total stockholders’ equity

    5,000,001       5,000,001       23,724  
 

 

 

   

 

 

   

 

 

 

Total liabilities and stockholders’ equity

  $ 705,562,140     $ 697,339,051     $ 25,000  


 

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     Nine Months
Ended
September 30,
2019
    Nine Months
Ended
September 30,
2018
 

Revenues

   $ —     $ —  

Dividend income

     11,311,397       3,769,609  

General and administrative expenses

     (1,733,276     (376,095
  

 

 

   

 

 

 

Income before income tax provision

     9,578,121       3,393,514  

Provision for income tax

     (2,012,008     (711,635
  

 

 

   

 

 

 

Net Income

     7,566,113     $ 2,681,879  
  

 

 

   

 

 

 

Weighted average number of shares outstanding of Class A common stock:

     69,000,000       69,000,000  
  

 

 

   

 

 

 

Basic and diluted net income per share, Class A

   $ 0.09     $ 0.03  
  

 

 

   

 

 

 

Weighted average number of shares outstanding of Class B common stock:

     17,250,000       17,250,000  
  

 

 

   

 

 

 

Basic and diluted net income per share, Class B

   $ 0.09     $ 0.03  
  

 

 

   

 

 

 

 

     Year Ended
December 31,
2018
    Year Ended
December 31,
2017
 

Revenues

   $ —     $ —  

Dividend income

     7,407,083       —    

General and administrative expenses

     (1,036,896     (1,276
  

 

 

   

 

 

 

Income (loss) before income tax (provision) benefit

     6,370,187       (1,276

Provision for income tax

     (1,339,439     —    
  

 

 

   

 

 

 

Net Income/ (loss)

   $ 5,030,748     $ (1,276

Weighted average shares outstanding of Class A common stock

     69,000,000       —    
  

 

 

   

 

 

 

Basic and diluted net income per share, Class A

   $ 0.06     $ —  
  

 

 

   

 

 

 

Weighted average shares outstanding of Class B common stock

     17,250,000       17,250,000  
  

 

 

   

 

 

 

Basic and diluted net income per share, Class B

   $ 0.06     $ (0.00
  

 

 

   

 

 

 


 

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SELECTED CONSOLIDATED HISTORICAL FINANCIAL AND OTHER INFORMATION OF

VERTIV HOLDINGS

The following table sets forth Vertiv’s selected historical consolidated and combined financial data at the dates and for the periods indicated. During 2017, Vertiv elected to change its fiscal year end from September 30 to December 31. The change became effective at the end of the period ended December 31, 2016. Unless otherwise noted, all references to “fiscal” in this report refer to the twelve-month fiscal year, which as of and prior to September 30, 2016 ended on September 30, and beginning after December 31, 2016 ends on December 31 of each year. The selected financial data presented in the below table for the period prior to the Separation, including the summary combined statement of earnings (loss) data for the two-month period ended November 30, 2016 and the fiscal years ended September 30, 2016, 2015, and 2014 are derived from the combined financial statements for the Network Power business of Emerson (or Vertiv Predecessor), Vertiv’s accounting predecessor, and is referred to in this proxy statement. as the “Predecessor” period. The selected financial data presented in the below table for the period following the Separation, including the summary consolidated statement of earnings (loss) data for the nine months ended September 30, 2019 and 2018, for the years ended December 31, 2018 and 2017, and the one-month period ended December 31, 2016 and the consolidated balance sheet data as of September 30, 2019 and 2018, December 31, 2018, 2017 and 2016, are each derived from Vertiv’s consolidated financial statements and is referred to in this proxy statement as the “Successor” period. The data should be read in conjunction with the consolidated financial statements, related notes, and other financial information included herein. Vertiv’s historical results for any prior period are not necessarily indicative of results Vertiv may expect or achieve in any future period.

The selected historical consolidated and combined financial data set forth below should be read in conjunction with, and are qualified by reference to, “Vertiv Holdings Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Vertiv Holdings consolidated and combined financial statements and related notes thereto included elsewhere in this proxy statement.

 

    Successor                 Predecessor  

(in millions)

  Nine
months
ended
September 30,
2019
    Nine
months
ended
September 30,
2018
    Year
ended
December 31,
2018
    Year
ended
December 31,
2017
    One
month ended
December 31,
2016
                Two
months
ended
November 30,
2016
    Year
ended
September 30,
2016
    Year
ended
September 30,
2015
    Year
ended
September 30,
2014
 

Consolidated and Combined Statement of Earnings Data

                       

Net sales

                       

Net sales

  $ 3,259.7     $ 3,114.0     $ 4,285.6     $ 3,879.4     $ 301.7           $ 566.2     $ 3,943.5     $ 4,025.1     $ 4,461.8  

Costs and expenses

                       

Cost of sales

    2,193.9       2,063.4       2,865.2       2,566.8       240.3             369.3       2,532.6       2,669.1       2,874.9  

Selling, General and administrative expenses

    809.0       920.4       1,223.8       1,086.0       162.3             164.3       980.8       1,009.7       1,079.8  

Goodwill impairment

    —         —         —         —         —               —         57.0       154.0       508.0  

Other deductions, net

    98.6       166.2       178.8       254.4       42.5             14.7       125.9       208.0       153.0  

Interest expense (income)

    234.2       213.5       288.8       379.3       27.8             0.3       (3.5     (3.8     (2.0
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

         

 

 

   

 

 

   

 

 

   

 

 

 

Earnings (loss) from continuing operations before income taxes

    (76.0     (249.5     (271.0     (407.1     (171.2           17.6       250.7       (11.9     (151.9

Income tax expense (benefit)

    30.9       32.2       49.9       (19.7     (4.3           24.3       140.1       100.3       140.5  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

         

 

 

   

 

 

   

 

 

   

 

 

 

Earnings (loss) from continuing operations

    (106.9     (281.7     (320.9     (387.4     (166.9           (6.7     110.6       (112.2     (292.4

Earnings (loss) from discontinued operations, net of income taxes

    —         7.4       6.9       17.8       (4.3           7.2       47.1       50.4       56.8  

Net earnings (loss)

  $ (106.9   $ (274.3   $ (314.0   $ (369.6   $ (171.2         $ 0.5     $ 157.7     $ (61.8   $ (235.6


 

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    Successor                 Predecessor  

(in millions)

  Nine
months
ended
September 30,
2019
    Nine
months
ended
September 30,
2018
    Year
ended
December 31,
2018
    Year
ended
December 31,
2017
    One
month ended
December 31,
2016
                Two
months
ended
November 30,
2016
    Year
ended
September 30,
2016
    Year
ended
September 30,
2015
    Year
ended
September 30,
2014
 

Consolidated and Combined Cash Flow Data:

                       

Net cash provided by (used for) operating activities

  $ (56.6   $ (251.6   $ (221.9   $ (49.6   $ 59.8           $ (37.2   $ 370.2     $ 340.5     $ 441.8  

Net cash provided by (used for) investing activities

    (38.4     (192.6     (207.7     1,058.1       (3,925.2           (10.5     (30.2     (46.4     (103.8

Net cash provided by (used for) financing activities

    33.8       145.8       245.1       (874.1     4,106.6             (136.8     (199.1     (292.9     (295.3

Purchase of property, plant and equipment

    (27.9     (45.0     (64.6     (36.7     (4.7           (8.5     (34.0     (44.9     (54.6

Consolidated and Combined Balance Sheet Data (at end of period):

                       

Cash

  $ 149.3     $ 99.4     $ 215.1     $ 388.0     $ 249.6           $ 92.3     $ 272.0     $ 131.6     $ 157.8  

Working capital(1)

    492.0       433.8       488.9       539.2       444.1             456.8       585.4       507.1       640.8  

Total current assets

    1,963.3       1,927.2       2,095.3       1,988.1       1,935.9             1,805.9       1,989.1       1,812.2       2,049.5  

Property, plant and equipment, net

    415.2       440.2       441.7       462.8       444.5             299.7       308.1       331.1       373.3  

Total assets

    4,611.2       4,661.2       4,794.4       4,808.5       5,859.3             4,456.7       4,709.0       4,745.9       5,427.8  

Total equity

    (696.2     (482.9     (540.3     (129.6     1,120.0             2,858.1       3,068.3       3,162.4       3,707.3  

Total debt

    3,479.5       3,324.2       3,427.8       3,159.6       2,916.1             —         —         —         N/A  

Other Financial Data:

                       

EBITDA(2)(4)

  $ 310.0     $ 128.9     $ 234.8     $ 259.0     $ (98.8         $ 39.6     $ 388.9     $ 151.7    

Adjusted EBITDA(3)(4)

    392.8       345.3       502.4       500.0       46.3             40.3       490.2       400.4    

 

(1)

Vertiv defines working capital as current assets less current liabilities

(2)

Vertiv defines EBITDA as earnings (loss) from continuing operations before interest expense, net, income tax expense (benefits), and depreciation and amortization. We provide EBITDA in this proxy statement because Vertiv’s management finds it useful in evaluating the performance and underlying operations of its business. We provide a detailed description of EBITDA and how we use it under “Non-GAAP Financial Measures.”

(3)

Vertiv defines Adjusted EBITDA as EBITDA, as adjusted to exclude certain unusual or non-recurring items, certain non-cash items and other items that are not indicative of ongoing operations. We provide Adjusted EBITDA in this proxy statement because Vertiv’s management finds its useful in evaluating the performance and underlying operations of its business. We provide a detailed description of Adjusted EBITDA and how we use it under “Non-GAAP Financial Measures.”

(4)

We have included certain non-GAAP financial measures in this proxy statement, including EBITDA and Adjusted EBITDA. The indentures governing the Senior Notes and the credit agreements governing the Asset-Based Revolving Credit Facility and the Term Loan Facility include definitions of EBITDA-based metrics that are different from the definition of EBITDA and Adjusted EBITDA used herein. EBITDA and Adjusted EBITDA are not recognized terms under GAAP and do not purport to be an alternative to net income as a measure of operating performance or to cash flows from operating activities as a measure of liquidity. Additionally, EBITDA and Adjusted EBITDA are not intended to be measures of free cash flow available for management’s discretionary use, as they do not consider certain cash requirements such as tax payments and debt service requirements. We believe that presenting these measures may help investors better understand Vertiv’s financial performance in connection with their analysis of its business. EBITDA and Adjusted EBITDA should be considered in addition to, not a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. You are encouraged to evaluate each adjustment and the reasons we consider them appropriate for supplemental analysis. In evaluating EBITDA and Adjusted EBITDA, you should be aware that in the future Vertiv may incur expenses similar to the adjustments in this presentation. Our presentation of EBITDA and Adjusted EBITDA should not be construed as an inference that future results will be unaffected by unusual or non-recurring items. Additionally, since not all companies use identical calculations, the presentations of EBITDA and Adjusted EBITDA may not be comparable to similarly titled measures of other companies. See “Non-GAAP Financial Measures.”



 

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The following is a reconciliation of EBITDA and Adjusted EBITDA to the comparable GAAP measure of Net Earnings (loss):

 

    Successor                 Predecessor  

(in millions)

  Nine
months
ended
September 30,
2019
    Nine
months
ended
September 30,
2018
    Year
ended
December 31,
2018
    Year
ended
December 31,
2017
    One
month
ended
December 31,
2016
                Two
months
ended
November 30,
2016
    Year
ended
September 30,
2016
    Year
ended
September 30,
2015
 

Net earnings (loss)

  $ (106.9   $ (274.3   $ (314.0   $ (369.6   $ (171.2         $ 0.5     $ 157.7     $ (61.8

Earning (loss) from discontinued operations-net of income taxes

    —         7.4       6.9       17.8       (4.3           7.2       47.1       50.4  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

         

 

 

   

 

 

   

 

 

 

Earnings (loss) from continuing operations

  $ (106.9   $ (281.7   $ (320.9   $ (387.4   $ (166.9         $ (6.7   $ 110.6     $ (112.2

Interest expense (income), net

    234.2       213.5       288.8       379.3       27.8             0.3       (3.5     (3.8

Income tax expense (Benefit)

    30.9       32.2       49.9       (19.7     (4.3           24.3       140.1       100.3  

Depreciation and amortization

    151.8       164.9       217.0       286.8       44.6             21.7       141.7       167.4  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

         

 

 

   

 

 

   

 

 

 

EBITDA

  $ 310.0     $ 128.9     $ 234.8     $ 259.0     $ (98.8         $ 39.6     $ 388.9     $ 151.7  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

         

 

 

   

 

 

   

 

 

 

Cost to achieve operational initiatives(a)

    34.6       67.3       99.9       83.5       —               —         —         —    

Digital project implementation costs(b)

    32.7       53.2       75.5       6.9       —               —         —         —    

Transition costs(c)

    15.4       53.1       70.7       104.4       14.6             1.2       —         —    

Foreign currency losses, net(d)

    (6.6     0.2       (5.4     11.2       0.1             (7.3     12.7       21.4  

Contingent consideration(e)

    —         21.7       (10.0     (17.9     74.8             —         —         —    

Advisory fees(f)

    5.0       3.8       5.0       19.2       1.3             —         —         —    

Impact of purchase accounting(g)

    1.5       3.0       5.9       33.1       51.7             —         —         —    

Loss (gain) on asset disposals(h)

    0.2       3.0       3.1       0.6       —               —         (5.0     1.6  

Reserve for warranty item(i)

    —         —         8.5       —         —               —         —         —    

Reserve for customer dispute(j)

    —         4.0       7.3       —         —               —         —         —    

Acquisition costs(k)

    —         7.1       7.1       —         —               —         —         —    

Goodwill impairment(l)

    —         —         —         —         —               —         57.0       154.0  

Restructuring expense(m)

    —         —         —         —         2.6             1.7       5.8       61.4  

Stock-based compensation(n)

    —         —         —         —         —               4.0       11.4       5.2  

Special compensation(o)

    —         —         —         —         —               —         6.2       1.0  

Latin America balance sheet write-offs(p)

    —         —         —         —         —               —         0.5       1.8  

Large Asia project bad debt(q)

    —         —         —         —         —               —         —         9.0  

Incremental stand alone cost(r)

    —         —         —         —         —               —         (1.9     (6.7

Separation costs(s)

    —         —         —         —         —               —         12.3       —    

VAT penalty(t)

    —         —         —         —         —               —         2.3       —    

Write off of joint venture(u)

    —         —         —         —         —               1.1       —         —    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

         

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

  $ 392.8     $ 345.3     $ 502.4     $ 500.0     $ 46.3           $ 40.3     $ 490.2     $ 400.4  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

         

 

 

   

 

 

   

 

 

 

 

(a)

Cost to achieve operational initiatives encompass both transformation efforts and restructuring, as a result of major activities designed to enhance the efficiency of a business unit, department or function. Restructuring costs include expenses associated with Vertiv’s efforts to improve operational efficiency and deploy assets to remain competitive on a worldwide basis and are further detailed in note 5—Restructuring costs, in Vertiv Holdings’ historical consolidated financial statements and note 4—Restructuring costs, in Vertiv Holdings’



 

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  condensed consolidated unaudited quarterly financial statements included elsewhere in this proxy statement. Transformation efforts primarily include third party advisory and consulting fees that relate to activities contemplated in connection with the separation from Emerson and are expected to be significantly complete by 2020. Due to the volatility of restructuring and transformation costs and because these costs were incremental and materially related to specific transformative activities after its separation from Emerson, Vertiv does not view these costs as indicative of future ongoing operations of the business.
(b)

Investments in global digital and IT systems to drive efficiency, speed and cost reductions. These adjustments are substantially comprised of acquiring and implementing critical information and accounting systems required post separation from Emerson. The projects for each of these initiatives span multiple years due to the significance and complexity of the activities. However, Vertiv does not believe that these costs are indicative of ongoing operations.

(c)

Transition costs are primarily made up of professional fees and other costs related to establishing the business as a stand-alone company, including rebranding, following the separation from Emerson. Vertiv believes that expenses to facilitate the separation from Emerson will only be incurred the first three years post acquisition and therefore are not indicative of future ongoing operations of the business.

(d)

Represents foreign currency gains and losses as well as losses on hedges of balance sheet exposures that do not receive deferral accounting. Vertiv believes that such adjustment is useful to investors to better identify trends in our business.

(e)

Adjustments to contingent consideration were recorded in relation to the Energy Labs, Inc. and the Emerson Network Power business acquisitions, as described in note 2—Acquisitions, in Vertiv Holdings’ historical consolidated financial statements included elsewhere in this proxy statement. As the magnitude and volatility of changes in the fair value of contingent consideration vary significantly from period to period based on the arrangements related to specific acquisitions, we do not believe the adjustments are reflective of our ongoing operations.

(f)

Advisory fee paid to an affiliate of Vertiv Holdings, inclusive of fees associated with specific financing arrangements, as described in note 14—Related party transactions, in Vertiv Holdings’ historical consolidated financial statements and note 10—Related party transactions, in Vertiv Holdings’ condensed consolidated unaudited quarterly financial statements included elsewhere in this proxy statement. Such fee is not expected to continue post-business combination.

(g)

Represents the purchase accounting related to fair value adjustments to deferred revenue, inventory and rent expense on the opening balance sheets of business acquisitions, as described in note 2—Acquisitions, in Vertiv Holdings’ historical consolidated financial statements included elsewhere in this proxy statement. Vertiv believes that such adjustment is useful to investors to better identify trends in our business.

(h)

Vertiv management adjusts the impact of loss (gain) on asset disposals in order to facilitate period to period comparability of operating results for investors.

(i)

Represents the warranty reserve for a specific, large unusual claim incurred during 2018.

(j)

Represents a reserve for an ongoing customer payment dispute related to a large project completed in the Americas.

(k)

Represents a charge to cost of sales and inventory related to discontinuation of a product line as a result of the Geist acquisition.

(l)

As a result of our annual impairment test, goodwill impairment charges of $57.0 and $154.0 were recorded in 2016 and 2015, respectively, as a result of the sale price of Vertiv in connection with the Separation and the lower than forecasted operating results in the EMEA segment.

(m)

During the predecessor period and one month ended December 31, 2016, reflects expenses for actions taken to improve productivity and reduce costs in our business primarily related to actions in Europe and the Americas to rationalize legal entities, implement a common IT platform and reduce transaction complexity as well as other global headcount reductions associated with the aforementioned actions and those associated with the sale transaction. Subsequent to December 31, 2016, restructuring expense is included within “Cost to achieve operational initiatives.”

(n)

Represents the Predecessor’s portion of Emerson’s stock-based compensation plans.

(o)

Includes cash bonuses paid in lieu of Emerson’s stock-based compensation and other bonus payments.

(p)

Represents charges recorded to write-off balance sheet items in Argentina, Brazil, and Chile and a reserve for net assets in Venezuela.

(q)

Represents bad debt expense related to a large project completed in Asia.

(r)

Represents the difference between management’s estimated stand alone cost and the management fee previously charged by Emerson.

(s)

Vertiv incurred non-recurring costs in connection with the Separation, consisting primarily of fees associated with the Separation.

(t)

Represents non-income VAT penalty assessments received in Brazil for years covering 2011-2014.

(u)

Represents the impact associated with the write off of the investment in a joint venture in Portugal.



 

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SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

The following unaudited pro forma condensed combined balance sheet as of September 30, 2019 and the unaudited pro forma condensed combined statements of operations for the year ended December 31, 2018 and the nine months ended September 30, 2019 present the historical financial statements of Vertiv Holdings, adjusted to reflect the Business Combination. The Company and Vertiv shall collectively be referred to herein as the “Companies.” The Companies, subsequent to the Business Combination, shall be referred to herein as the “Combined Company.”

The unaudited pro forma condensed combined balance sheet as of September 30, 2019 assumes that the Business Combination was completed on September 30, 2019. The unaudited pro forma condensed combined statements of operations for the year ended December 31, 2018 and for the nine months ended September 30, 2019 give pro forma effect to the Business Combination as if it had occurred on January 1, 2018.

The Company’s balances have been classified consistently with Vertiv’s presentation. The unaudited pro forma condensed combined balance sheet and statement of operations as of and for the nine months ended September 30, 2019 were derived from Vertiv’s unaudited condensed consolidated financial statements as of and for the nine months ended September 30, 2019 and the Company’s unaudited condensed consolidated financial statements as of and for the nine months ended September 30, 2019. The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2018 was derived from Vertiv’s audited consolidated statement of operations for the year ended December 31, 2018 and the Company’s audited consolidated statement of operations for the year ended December 31, 2018.

On December 10, 2019, the Company entered into the Merger Agreement with First Merger Sub, Second Merger Sub, Vertiv Holdings and the Vertiv Stockholder. After giving effect to the Business Combination, the Company will own, directly or indirectly, all of the assets of Vertiv and its subsidiaries and the Vertiv Stockholder will hold a portion of the Company’s Class A common stock. The pro forma condensed combined information contained herein assumes the Company’s stockholders approve the proposed Merger Transaction. The Company’s public stockholders may elect to redeem their shares of Class A common stock even if they approve the proposed Business Combination. The Company cannot predict how many of its public stockholders will elect to redeem their shares of Class A common stock to cash. As a result, the Company has provided pro forma condensed combined financial statements under two different redemption scenarios:

 

   

Assuming no redemptions: This presentation assumes that no shares of Class A common stock are redeemed.

 

   

Assuming maximum redemptions: This presentation assumes that the maximum number of shares of Class A common stock are redeemed such that the remaining funds held in the trust account after the payment of the redeeming shares’ pro-rata allocation along with the proceeds from the PIPE Investment are sufficient to satisfy the Minimum Required Funds Condition. Based on the amount of $705.0 million in the trust account as of September 30, 2019, inclusive of accrued dividends, and taking into account the anticipated gross proceeds of approximately $1,239.0 million from the PIPE Investment, approximately 55,400,000 shares of Class A common stock may be redeemed and still enable us to have sufficient cash to satisfy the cash closing conditions in the Merger Agreement.

The actual redemptions will likely be within the scenarios described above; however, there can be no assurance regarding which scenario will be closest to the actual results. Under both scenarios, Vertiv is considered the accounting acquirer, as further discussed in “—Basis of the Pro Forma Presentation.”

See “Unaudited Pro Forma Condensed Combined Financial Information” for more details.



 

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Selected Unaudited Pro Forma Financial Information

(Dollars in millions except per share data)

 

     Pro Forma Combined
(Assuming No Redemptions)
    Pro Forma Combined (Assuming
Maximum Redemptions)
 

Statement of Operations Data—Nine Months Ended September 30, 2019

    

Net Sales

   $ 3,259.7     $ 3,259.7  

Loss from continuing operations

   $ 23.4     $ 42.1  

Pro Forma weighted average common shares outstanding—basic and diluted

     337,650,000       302,250,000  

Pro Forma net income (loss) per share basic and diluted

   $ (0.07   $ (0.14

Statement of Operations Data—Year Ended December 31, 2018

    

Net Sales

   $ 4,285.6     $ 4,285.6  

Loss from continuing operations

   $ 220.1     $ 245.0  

Pro Forma weighted average common shares outstanding—basic and diluted

     337,650,000       302,250,000  

Pro Forma net income (loss) per share basic and diluted

   $ (0.65   $ (0.81

Balance Sheet Data—As of September 30, 2019

    

Total current assets

   $ 1,963.9     $ 1,963.9  

Total assets

   $ 4,611.8     $ 4,611.8  

Total current liabilities

   $ 1,472.5     $ 1,472.5  

Total liabilities

   $ 4,001.4     $ 4,352.6  

Total equity

   $ 610.4     $ 259.2  


 

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COMPARATIVE PER SHARE INFORMATION

The following table sets forth:

 

   

historical per share information of GSAH for the year ended December 31, 2018 and for the nine months ended September 30, 2019; and

 

   

unaudited pro forma per share information of the combined company for the fiscal year ended December 31, 2018 and the nine months ended September 30, 2019, after giving effect to the Business Combination, assuming two redemption scenarios as follows:

 

   

Assuming no redemptions: This presentation assumes that no shares of Class A common stock are redeemed.

 

   

Assuming maximum redemptions: This presentation assumes that the maximum number of shares of Class A common stock are redeemed such that the remaining funds held in the trust account after the payment of the redeeming shares’ pro-rata allocation along with the proceeds from the PIPE Investment are sufficient to satisfy the Minimum Required Funds Condition. Based on the amount of $705.0 million in the trust account as of September 30, 2019, inclusive of accrued dividends, and taking into account the anticipated gross proceeds of approximately $1,239.0 million from the PIPE Investment, approximately 55,400,000 shares of Class A common stock may be redeemed and still enable us to have sufficient cash to satisfy the cash closing conditions in the Merger Agreement.

The pro forma book value, net income (loss) and cash dividends per share information reflect the Business Combination contemplated by the Merger Agreement as if it had occurred on January 1, 2018. The following table is also based on the assumption that there are no adjustments for the outstanding warrants issued by GSAH as such securities are not exercisable until 30 days after the closing of the Business Combination.



 

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The historical information should be read in conjunction with “Selected Consolidated Historical Financial and Other Information of Vertiv Holdings,” “Selected Historical Financial Information of GSAH,” “Vertiv Holdings’ Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “GSAH’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained elsewhere in this proxy statement and the audited historical financial statements and the related notes of Vertiv Holdings and GSAH contained elsewhere in this proxy statement. The unaudited pro forma condensed combined share information is derived from, and should be read in conjunction with, the unaudited pro forma condensed combined financial information and related notes included elsewhere in this proxy statement. The unaudited pro forma condensed combined net income per share information below does not purport to represent what our actual results of operations would have been had the Business Combination been completed or to project our results of operations that may be achieved after the Business Combination. The unaudited pro forma book value per share information below does not purport to represent what our book value would have been had the Business Combination been completed nor the book value per share for any future date or period.

 

     Vertiv
historical(2)
     GSAH
historical
     Proforma
combined
(assuming no
redemptions)
    Proforma
combined
(assuming
maximum
redemptions)
 

As of and for the Nine months ended September 30, 2019

          

Book value per share(1)

     n/a      $ 0.07      $ 1.81     $ 0.86  

Net income (loss) per share—basic and diluted

     n/a        0.09        (0.07     (0.14

Weighted average shares outstanding—basic and diluted

     n/a        69,000,000        337,650,000       302,250,000  

As of and for the Twelve months ended December 31, 2018

          

Net income (loss) per share—basic and diluted

     n/a        0.06        (0.65     (0.81

Weighted average shares outstanding—basic and diluted

     n/a        69,000,000        337,650,000       302,250,000  

 

(1)

Book value per share = Total equity / Total basic and diluted outstanding shares.

(2)

Historically, as a private limited liability company, Vertiv has not calculated net earnings (loss) per share.



 

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RISK FACTORS

You should carefully review and consider the following risk factors and the other information contained in this proxy statement, including the Annexes and the accompanying financial statements of the Company and Vertiv Holdings, in evaluating the Business Combination and the proposals to be voted on at the Special Meeting. You should carefully consider the following risk factors in addition to the other information included in this proxy statement, including matters addressed in the section entitled “Cautionary Note Regarding Forward-Looking Statements.” We or Vertiv may face additional risks and uncertainties that are not presently known to us or Vertiv, or that we or Vertiv currently deems immaterial, which may also impair our or Vertiv’s business or financial condition.

Risks Related to Vertiv’s Business

The following risk factors apply to the business and operations of Vertiv and will also apply to the business and operations of the post-business combination company. The occurrence of one or more of the events or circumstances described in these risk factors, alone or in combination with other events or circumstances, may adversely affect the ability to complete or realize the anticipated benefits of the Business Combination, and may have a material adverse effect on the business, cash flows, financial condition and results of operations of the post-business combination company. Unless the context otherwise requires, all references in this subsection to the “Company,” “we,” “us” or “our” refer to the business of Vertiv prior to the consummation of the Business Combination, which will be the business of the post-business combination company following the consummation of the Business Combination.

Economic weakness and uncertainty could adversely impact our business, results of operations and financial condition.

Worldwide economic conditions impact demand for our offerings, and economic weakness and uncertainty in global, regional or local areas may result in decreased orders, revenue, gross margin and earnings. For example, our business has been impacted from time to time in the past by macroeconomic weakness in the United States and various regions outside of the United States. Any such economic weakness and uncertainty may result in:

 

   

capital spending constraints for customers and, as a result, reduced demand for our offerings;

 

   

increased price competition for our offerings;

 

   

excess and obsolete inventories;

 

   

supply constraints if the number of suppliers decreases due to financial hardship;

 

   

restricted access to capital markets and financing, resulting in delayed or missed payments to us and additional bad debt expense;

 

   

excess facilities and manufacturing capacity;

 

   

higher overhead costs as a percentage of revenue and higher interest expense;

 

   

loss of orders, including as a result of corruption, the risk of which is increased by a weak economic climate;

 

   

significant declines in the value of foreign currencies relative to the U.S. dollar, impacting our revenues and results of operations;

 

   

financial difficulty for our customers; and

 

   

increased difficulty in forecasting business activity for us, customers, the sales channel and vendors.

 

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We rely on the continued growth of our customers’ networks, in particular data center and communication networks, and any decreases in demand in these networks could lead to a decrease in our offerings.

A substantial portion of our business depends on the continued growth of our customers’ data centers and communication networks. If these networks do not continue to grow, whether as a result of changes in the economy, capital spending, building capacity in excess of demand, delays in receiving required permits and approvals, or otherwise overall demand could decrease for our offerings, which would have an adverse effect on our business, results of operations and financial condition.

If we fail to anticipate technology shifts, market needs and opportunities, and fail to develop appropriate products, product enhancements and services in a timely manner to meet those changes, we may not be able to compete effectively against our global competitors and, as a result, our ability to generate revenues will suffer.

We believe that our future success will depend in part upon our ability to anticipate technology shifts and to enhance and develop new products and services that meet or anticipate such technology changes. Any such developments will require continued investment in engineering, capital equipment, marketing, customer service and technical support. For example, we will need to anticipate potential market shifts to alternative power architectures, cooling technologies and energy storage that could diminish the demand for our existing offerings or affect our margins.

Also, our primary global competitors are sophisticated companies with significant resources that may develop superior products and services or may adapt more quickly to new technologies and technology shifts, industry changes or evolving customer requirements. If we fail to anticipate technology changes, shifting market needs or keep pace with our competitors’ products, or if we fail to develop and introduce new products or enhancements in a timely manner, we may lose customers and experience decreased or delayed market acceptance and sales of present and future products and our ability to generate revenues will suffer.

The long sales cycles for certain of our products and solutions offerings, as well as unpredictable placing or canceling of customer orders, particularly large orders, may cause our revenues and operating results to vary significantly from quarter-to-quarter, which could make our future operational results less predictable.

A customer’s decision to purchase certain of our products or solutions, particularly products new to the market or long-term end-to-end solutions, may involve a lengthy contracting, design and qualification process. In particular, customers deciding on the design and implementation of large deployments may have lengthy and unpredictable procurement processes that may delay or impact expected future orders. As a result, the order booking and sales recognition process may be uncertain and unpredictable, with some customers placing large orders with short lead times on little advance notice and others requiring lengthy, open-ended processes that may change depending on global or regional economic weakness. This may cause our revenues and operating results to vary unexpectedly from quarter-to-quarter, making our future operational results less predictable.

Any disruption or any consolidation of our customers’ markets could result in declines in the sales volume and prices of our products.

The disruption of our customers’ markets could occur due to a number of factors, including government policy changes, industry consolidations or the shifting of market size and power among customers. Such consolidations or other disruptions may result in certain parties gaining additional purchasing leverage and, consequently, increasing the product pricing pressures facing our business. Such changes could impact spending as customers evolve their strategies or integrate acquired operations. For example, if fewer customers exist due to consolidation, the loss of a major customer could have a material impact on results not anticipated in a customer marketplace composed of more numerous participants. Any reduction in customer spending on technological development as a result of these and other factors could have an adverse effect on our business, results of operations and financial condition. See also “—Future legislation and regulation, both in the United States and

 

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abroad, governing the Internet services, other related communications services and information technologies could disrupt our customers’ markets resulting in declines in sales volume and prices of our products and otherwise have an adverse effect on our business operations.”

Large companies, such as communication network and hyperscale/cloud and colocation data center providers, often require more favorable terms and conditions in our contracts with such companies that could result in downward pricing pressures on our business.

Large companies, such as communication network and hyperscale/cloud and colocation data center providers, comprise a portion of our customer base and generally have greater purchasing power than smaller entities. Accordingly, these customers often require more favorable terms and conditions in contracts from suppliers including us. Consolidation among such large customers can further increase their buying power and ability to require onerous terms. See “—Any disruption or any consolidation of our customers’ markets could result in declines in the sales volume and prices of our products.” In addition, these customers may impose substantial penalties for any product or service failures caused by us. As we seek to sell more products to such customers, we may be required to agree to such terms and conditions more frequently, which may include terms that affect the timing of our cash flows and ability to recognize revenue, and could have an adverse effect on our business, results of operations and financial condition.

We derive a portion of our revenue from contracts with governmental customers. Such customers and their respective agencies are subject to increased pressures to reduce expenses. Contracts with governmental customers may also contain additional or more onerous terms and conditions that are not common among commercial customers. In addition, as a result of our contracts with governmental customers, we are at risk of being subject to audits, investigations, sanctions and penalties by such governments, which could result in various civil and criminal penalties, administrative sanctions, and fines and suspensions.

We derive a portion of our revenue from contracts with governmental customers, including the U.S., state and local governments. There is increased pressure on such governmental customers and their respective agencies to reduce spending and some of our contracts at the state and local levels are subject to government funding authorizations. These factors combine to potentially limit the revenue we derive from government contracts.

Additionally, government contracts are generally subject to audits and investigations which could result in various civil and criminal penalties and administrative sanctions, including termination of contracts, refund of a portion of fees received, forfeiture of profits, suspension of payments, fines and suspensions or debarment from future government business. Such contracts are also subject to various laws and regulations that apply to doing business with governments. The laws relating to government contracts differ from other commercial contracting laws and our government contracts may contain pricing and other terms and conditions that are less favorable to the Company than those in commercial contracts.

We have, and we intend to continue pursuing, long-term, fixed-price contracts (including long-term, turnkey projects). Our failure to mitigate certain risks associated with our long-term, fixed-price contracts (including long-term, turnkey projects) may result in excess costs and penalties.

We have, and we intend to continue pursuing, long-term, fixed-price contracts (including long-term, turnkey projects). These contracts and projects have a duration greater than twelve months. Such contracts and projects involve substantial risks, which may result in excess costs and penalties, and include but are not limited to:

 

   

unanticipated technical problems with equipment, requiring us to incur added expenses to remedy such problems;

 

   

changes in costs or shortages of components, materials, labor or construction equipment;

 

   

difficulties in obtaining required governmental permits or approvals;

 

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project modifications and changes to the scope of work resulting in unanticipated costs;

 

   

delays caused by local weather or other conditions beyond our control;

 

   

changes in regulations, permits or government policy;

 

   

the failure of suppliers, subcontractors or consortium partners to perform; and

 

   

penalties, if we cannot complete all or portions of the project within contracted time limits and performance levels.

Our failure to mitigate these risks may result in excess costs and penalties and may have an adverse effect on our results of operations and financial condition.

System security risks could disrupt our operations, and any such disruption could reduce our revenue, increase our expenses, damage our reputation and adversely impact our performance.

We rely on our information systems and the information systems of a variety of third parties for processing customer orders, shipping products, billing our customers, tracking inventory, supporting finance and accounting functions, financial statement preparation, payroll services, benefit administration and other general aspects of our business. Our information systems or those of our third-party providers may be vulnerable to attack or breach. Any such attack or breach could compromise such information systems, resulting in fraud, ransom attack or theft of proprietary or sensitive information which could be accessed, publicly disclosed, misused, stolen or lost. This could impede our sales, manufacturing, distribution or other critical functions and the financial costs we could incur to eliminate or alleviate these security risks could be significant and may be difficult to anticipate or measure. Moreover, such a breach could cause reputational and financial harm and subject us to liability to our customers, suppliers, business partners or any affected individual.

In addition, the products we produce or elements of such products that we procure from third parties may contain defects or weaknesses in design, architecture or manufacture, which could lead to system security vulnerabilities in our products and compromise the network security of our customers. If an actual or perceived breach of network security occurs, regardless of whether the breach is attributable to our products or services, the market perception of the effectiveness of our products or services could be harmed.

Implementations of new information systems and enhancements to our current systems may be costly and disruptive to our operations.

We recently commenced the implementation of new information systems, including enhancement to our enterprise resource plan, human capital management, and product lifecycle management systems. The implementation of new information systems and enhancements to current systems may be costly and disruptive to our operations. Any problems, disruptions, delays or other issues in the design and implementation of these systems or enhancements could adversely impact our ability to process customer orders, ship products, provide service and support to our customers, bill and collect in a timely manner from our customers, fulfill contractual obligations, accurately record and transfer information, recognize revenue, file securities, governance and compliance reports in a timely manner or otherwise run our business. If we are unable to successfully design and implement these new systems, enhancements and processes as planned, or if the implementation of these systems and processes is more lengthy or costly than anticipated, our business, results of operations and financial condition could be negatively impacted.

Failure to properly manage our supply chain and inventory could result in higher costs of production and delays in fulfilling customer orders, excess or obsolete materials or components, labor disruptions or shortages and delays in production.

Our operations, particularly our manufacturing and service operations, depend on our ability to accurately anticipate both our needs, including raw materials, components, products and services, from third-party suppliers,

 

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and such suppliers’ ability to timely deliver the quantities and quality required at reasonable prices. We have a large number of providers to support our global operations and breadth of offerings. In addition, certain of our suppliers are also competitors with us in one or more parts of our business and those suppliers may decide to discontinue business with us. Other supply chain risks that we could face include, but are not limited to, the following:

 

   

Volatility in the supply or price of raw materials. Our products rely on a variety of raw materials and components, including steel, copper and aluminum and electronic components. We may experience a shortage of, or a delay in receiving, such materials or components as a result of strong demand, supplier capacity constraints or other operational disruptions, restrictions on use of materials or components subject to our governance and compliance requirements, disputes with suppliers or problems in transitioning to new suppliers. Moreover, prices for some of these materials and components have historically been volatile and unpredictable, and such volatility is expected to continue. Ongoing supply issues may require us to reengineer some offerings, which could result in further costs and delays. If we are unable to secure necessary supplies at reasonable prices or acceptable quality, we may be unable to manufacture products, fulfill service orders or otherwise operate our business. We may also be unable to offset unexpected increases in material and component costs with our own price increases without suffering reduced volumes, revenues or operating income.

 

   

Contractual terms. As a result of long-term price or purchase commitments in contracts with our suppliers, we may be obligated to purchase materials, components or services at prices higher than those available in the current market, which may put us at a disadvantage to competitors who have access to components or services at lower prices, impact our gross margin, and, if these issues impact demand, may result in additional charges for inventory obsolescence. In addition, to secure the supply of certain materials and components on favorable terms, we may make strategic purchases of materials and components in advance or enter into non-cancelable commitments. If we fail to anticipate demand properly, we may have an oversupply which could result in excess or obsolete materials or components.

 

   

Contingent workers. In some locations, we rely on third-party suppliers for the provision of contingent workers, and our failure to manage such workers effectively could adversely impact our results of operations. We may in the future be exposed to various legal claims relating to the status of contingent workers. We may also be subject to labor shortages, oversupply, or fixed contractual terms relating to the contingent workforce, and our ability to manage the size of, and costs for, such contingent workforce may be further constrained by local laws or future changes to such laws. In addition, our customers may impose obligations on us with regard to our workforce and working conditions.

 

   

Single-source suppliers. We obtain certain materials or components from single-source suppliers due to technology, availability, price, quality or other considerations. Replacing a single-source supplier could delay production of some products because replacement suppliers, if available, may be subject to capacity constraints or other output limitations.

Any of these risks could have an adverse effect on our results of operations and financial condition.

In addition, our operations depend upon disciplined inventory management, as we balance the need to maintain strategic inventory levels to ensure competitive lead times against the risk of inventory obsolescence because of rapidly changing technology and customer requirements. Excess or obsolete inventory, including that procured pursuant to an inaccurate customer forecast, would result in a write-off of such inventory, causing an increase in costs of goods sold and a decline in our gross margins.

The areas in which we provide our offerings are highly competitive, and we experience competitive pressures from numerous and varied competitors.

We encounter competition from numerous and varied competitors in all areas of our business on a global and regional basis, and our competitors have targeted, and are expected to continue targeting, our primary areas

 

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of operation. We compete with such competitors primarily on the basis of reliability, quality, price, service and customer relationships. A significant element of our competitive strategy is focused on delivering high-quality products and solutions at the best relative global cost. If our products, services, and cost structure do not enable us to compete successfully based on any of those criteria, we may experience a decline in product sales and a corresponding loss of customers due to their selection of a competitor.

Our competitors, any of which could introduce new technologies or business models that disrupt significant portions of our markets and cause our customers to move a material portion of their business away from us to such competitors, include:

 

   

Large-scale, global competitors with broad, sometimes larger, product portfolios and service offerings. These competitors may have greater financial, technical and marketing resources available to them compared to the resources allocated to our products and services that compete against their products and services. Competitors within this category include Schneider Electric, S.E. and Eaton Corporation Plc, each of which have a large, global presence and compete directly in the markets in which we operate. Industry consolidation may also impact the competitive landscape by creating larger, more homogeneous and potentially stronger competitors in the markets in which we operate.

 

   

Offering-specific competitors with products and services that compete globally but with a limited set of product offerings. These competitors may be able to focus more closely on a segment of the market and be able to apply targeted financial, technical and marketing resources in ways that we cannot, potentially leading to stronger brand recognition and more competitive pricing.

 

   

Regional or country-level competitors that compete with us in a limited geographic area.

We may not realize the expected benefits from any rationalization and improvement efforts that we have taken or may take in the future.

We are continuously evaluating, considering and implementing possible rationalization and realignment initiatives to reduce our overall cost base and improve efficiency. There can be no assurance that we will fully realize the benefits of such efforts that we have taken or will take in the future within the expected time frame, or at all, and we may incur additional and/or unexpected costs to realize them. Further, we may not be able to sustain any achieved benefits in the future. In addition, these actions and potential future efforts could yield other unintended consequences, such as distraction of management and employees, business disruption, reduced employee morale and productivity, and unexpected employee attrition, including the inability to attract or retain key personnel. If we fail to achieve the expected benefits of any rationalization or realignment initiatives and improvement efforts, or if other unforeseen events occur in connection with such efforts, our business, results of operations and financial condition could be negatively impacted.

Disruption of, or consolidation or changes in, the markets or operating models of our independent sales representatives, distributors and original equipment manufacturers could have a material adverse effect on our results of operations.

We rely, in part, on independent sales representatives, distributors and original equipment manufacturers for the distribution of our products and services, some of whom operate on an exclusive basis. If these third parties’ financial condition or operations weaken, including as a result of a shift away from the go-to-market operating model they currently follow, and they are unable to successfully market and sell our products, our revenue and gross margins could be adversely affected. In addition, if there are disruptions or consolidation in their markets, such parties may be able to improve their negotiating position and renegotiate historical terms and agreements for the distribution of our products or terminate relationships with us in favor of our competitors. Changes in the negotiating position of such third parties in future periods could have an adverse effect on our results of operations.

 

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If we are unable to obtain performance and other guarantees from financial institutions, we may be prevented from bidding on, or obtaining, certain contracts, or our costs with respect to such contracts could be higher.

In accordance with industry practice for large data center construction opportunities, we are required to provide guarantees, including bid-bonds, advance payment and performance guarantees for our performance and project completion dates. Some customers require these guarantees to be issued by a financial institution, and historic global financial conditions have in the past, and may in the future, make it more difficult and expensive to obtain these guarantees. If, in the future, we cannot obtain such guarantees on commercially reasonable terms or at all, we could be prevented from bidding on, or obtaining, such large construction contracts, or our costs for such contracts could be higher and, in either case, could have an adverse effect on our business, results of operations and financial condition.

We may not realize all of the sales expected from our backlog of orders and contracts.

Our backlog consists of the value of product and service orders for which we have received a customer purchase order or purchase commitment and which have not yet been delivered. As of September 30, 2019 and December 31, 2018, our estimated combined order backlog was approximately $1,400.8 million and $1,502.0 million, respectively. The vast majority of our combined backlog is considered firm and expected to be delivered within one year. Our customers have the right in some circumstances, usually with penalties or termination consequences, to reduce or defer firm orders in backlog. If customers terminate, reduce or defer firm orders, whether due to fluctuations in their business needs or purchasing budgets or other reasons, our sales will be adversely affected and we may not realize the revenue we expect to generate from our backlog or, if realized, may not result in profitable revenue. More generally, we do not believe that our backlog estimates as of any date are indicative of revenues for any future period.

Our global operations and entity structure result in a complex tax structure where we are subject to income and other taxes in the United States and numerous foreign jurisdictions. Unanticipated changes in our tax provisions, variability of our quarterly and annual effective tax rate, the adoption of new tax legislation or exposure to additional tax liabilities could impact our financial performance.

Our global operations and entity structure result in a complex tax structure where we are subject to income and other taxes in the United States and numerous foreign jurisdictions. Variability in the mix and profitability of domestic and international activities, identification and resolution of various tax uncertainties, changes in tax laws and rates or other regulatory actions regarding taxes, and the extent to which we are able to realize net operating loss and other carryforwards included in deferred tax assets and avoid potential adverse outcomes included in deferred tax liabilities, among other matters, may significantly impact our effective income tax rate in the future. Our effective tax rate in any given financial reporting period may be materially impacted by mix and level of earnings or losses by jurisdiction as well as the discrete recognition of taxable events and exposures.

Future legislation and regulation, both in the United States and abroad, governing the Internet services, other related communications services and information technologies could disrupt our customers’ markets resulting in declines in sales volume and prices of our products and otherwise have an adverse effect on our business operations.

Various laws and governmental regulations, both in the United States and abroad, governing Internet related services, related communications services and information technologies remain largely unsettled, even in areas where there has been some legislative action. For example, in the United States regulations governing aspects of fixed broadband networks and wireless networks may change as a result of proposals regarding net neutrality and government regulation of the Internet, which could impact our communication networks customers. There may also be forthcoming regulation in the United States in the areas of cybersecurity, data privacy and data security, any of which could impact us and our customers. Similarly, data privacy regulations outside of the United States continue to evolve. Future legislation could impose additional costs on our business, disrupt our customers’ markets or require us to make changes in our operations which could adversely affect our operations.

 

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Any failure of our offerings could subject us to substantial liability, including product liability claims, which could damage our reputation or the reputation of one or more of our brands.

The offerings that we provide are complex, and our regular testing and quality control efforts may not be effective in controlling or detecting all quality issues or errors, particularly with respect to faulty components manufactured by third parties. Defects could expose us to product warranty claims, including substantial expense for the recall and repair or replacement of a product or component, and product liability claims, including liability for personal injury or property damage. We are not generally able to limit or exclude liability for personal injury or property damage to third parties under the laws of most jurisdictions in which we do business and, in the event of such incident, we could spend significant time, resources and money to resolve any such claim. We may be required to pay for losses or injuries purportedly caused by the design, manufacture, installation or operation of our products or by solutions performed by us or third parties.

An inability to cure a product defect could result in the failure of a product line, temporary or permanent withdrawal from a product or market, delays in customer payments or refusals by our customers to make such payments, increased inventory costs, product reengineering expenses and our customers’ inability to operate their enterprises. Such defects could also negatively impact customer satisfaction and sentiment, generate adverse publicity, reduce future sales opportunities and damage our reputation or the reputation of one or more of our brands. Any of these outcomes could have an adverse effect on our results of operations and financial condition.

In order to successfully operate as an independent public company and implement our business plans, we must identify, attract, develop, train, motivate and retain key employees, and failure to do so could seriously harm us.

In order to successfully operate as an independent public company and implement our business plans, we must identify, attract, develop, motivate, train and retain key employees, including qualified executives, management, engineering, sales, marketing, IT support and service personnel. The market for such individuals may be highly competitive. Attracting and retaining key employees in a competitive marketplace requires us to provide a competitive compensation package, which often includes cash- and equity-based compensation. If our total compensation package is not viewed as competitive, our ability to attract, motivate and retain key employees could be weakened and failure to successfully hire or retain key employees and executives could adversely impact us.

We may elect not to purchase insurance for certain business risks and expenses and, for the insurance coverage we have in place, such coverage may not address all of our potential exposures or, in the case of substantial losses, may be inadequate.

We may elect not to purchase insurance for certain business risks and expenses, such as claimed intellectual property infringement, where we believe we can adequately address the anticipated exposure or where insurance coverage is either not available at all or not available on a cost-effective basis. In addition, product liability and product recall insurance coverage is expensive and may not be available on acceptable terms, in sufficient amounts, or at all. We may be named as a defendant in product liability or other lawsuits asserting potentially large claims if an accident occurs at a location where our products, solutions or services have been or are being used. For those policies that we do have, insurance coverage may be inadequate in the case of substantial losses, or our insurers may refuse to cover us on specific claims. Losses not covered by insurance could be substantial and unpredictable and could adversely impact our financial condition and results of operations. If we are unable to maintain our portfolio of insurance coverage, whether at an acceptable cost or at all, or if there is an increase in the frequency or damage amounts claimed against us, our business, results of operations and financial condition may be negatively impacted.

 

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Any failure by us to identify, manage, integrate and complete acquisitions, divestitures and other significant transactions successfully could harm our financial results, business and prospects.

As part of our business strategy, we have in the past and may, from time to time, in the future acquire businesses or interests in businesses, including non-controlling interests, or form joint ventures or create strategic alliances. Whether we realize the anticipated benefits from such activities depends, in part, upon the successful integration between the businesses involved, the performance and development of the underlying products, capabilities or technologies, our correct assessment of assumed liabilities and the management of the operations. Accordingly, our financial results could be adversely affected by unanticipated performance and liability issues, our failure to achieve synergies and other benefits we expected to obtain, transaction-related charges, amortization related to intangibles, and charges for impairment of long-term assets. These transactions may not be successful.

Our results of operations may be adversely affected if we fail to realize the full value of our goodwill and intangible assets.

As of September 30, 2019, we had total goodwill and net intangible assets of $1,457.6 million which constituted approximately 31.6 percent of our total assets. We assess our net intangible assets and goodwill for impairment annually, and we conduct an interim evaluation whenever events or changes in circumstances, such as operating losses or a significant decline in earnings associated with the acquired business or asset, indicate that these assets may be impaired. For example, as a result of our annual impairment test, goodwill impairment charges of $57 million and $154 million were recorded in 2016 and 2015, respectively, relating to declines in the estimated fair value of the EMEA segment. In view of the sale price of Vertiv in connection with the Separation, and the lower than forecasted operating results in the EMEA segment, Vertiv reviewed this segment for potential impairment and recorded a $57 million non-cash goodwill impairment charge as of September 30, 2016. Additionally, the EMEA segment was unable to meet its operating objectives due to the continued weak economy in Western Europe since an acquisition in 2010. The weak economic recovery combined with intense competitive and market pressures negatively affected profitability in the EMEA segment in 2015 and as such we recorded an impairment of $154 million. Our ability to realize the value of goodwill and net intangible assets will depend on the future cash flows of the businesses to which the goodwill relates. If we are not able to realize the value of the goodwill and net intangible assets, this could adversely affect our results of operations and financial condition, and also result in an impairment of those assets.

The global scope of our operations could impair our ability to react quickly to changing business and market conditions and enforce compliance with company-wide standards and procedures.

As of September 30, 2019, we employed over 19,700 people globally and had manufacturing facilities in the Americas, Asia Pacific and EMEA. We generate substantial revenue outside of the United States and expect that foreign revenue will continue to represent a significant portion of our total revenues. In order to manage our day-to-day operations, we must overcome cultural and language barriers and assimilate different business practices. In addition, we are required to create compensation programs, employment policies and other administrative programs that comply with the laws of multiple countries. We also must communicate and monitor company-wide standards and directives across our global network. Our failure to successfully manage our geographically diverse operations could impair our ability to react quickly to changing business and market conditions and to enforce compliance with company-wide standards and procedures.

Our sales and operations in emerging markets exposes us to economic and political risks.

We generate a significant portion of our revenue from sales in emerging markets. Serving a global customer base requires that we place more materials, production and service assets in emerging markets to capitalize on market opportunities and maintain our cost position. Newer geographic markets may be relatively less profitable due to our investments associated with entering such markets and local pricing pressures, and we may have

 

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difficulty establishing and maintaining the operating infrastructure necessary to support the high growth rates associated with some of those markets. Operations in emerging markets can also present risks that are not encountered in countries with well-established economic and political systems, including:

 

   

changes or ongoing instability in a country’s or region’s economic or political conditions, including inflation, recession, interest rate fluctuations and actual or anticipated military or political conflicts, which could make it difficult for us to anticipate future business conditions, cause delays in the placement of orders, complicate our dealings with governments regarding permits and other regulatory matters and make our customers less willing to make cross-border investments;

 

   

unpredictable or more frequent foreign currency exchange rate fluctuations;

 

   

inadequate infrastructure, including lack of adequate power and water supplies, transportation, raw materials and parts;

 

   

foreign state takeovers of our facilities, trade protectionism, state-initiated industry consolidation or other similar government actions or control;

 

   

changes in and compliance with international, national or local regulatory and legal environments, including laws and policies affecting trade, economic sanctions, foreign investment, labor relations, foreign anti-bribery and anti-corruption;

 

   

the difficulty of enforcing agreements and collecting receivables through certain foreign legal systems;

 

   

longer collection cycles and financial instability among customers;

 

   

trade regulations, boycotts and embargoes, including policies adopted by countries that may favor domestic companies and technologies over foreign competitors, which could impair our ability to obtain materials necessary to fulfill contracts, pursue business or establish operations in such countries;

 

   

difficulty of obtaining adequate financing and/or insurance coverage;

 

   

fluctuations in freight costs, limitations on shipping and receiving capacity, and other disruptions in the transportation and shipping infrastructure;

 

   

political or social instability that may hinder our ability to send personnel abroad or cause us to move our operations to facilities in countries with higher costs and less efficiencies;

 

   

difficulties associated with repatriating earnings generated or held abroad in a tax-efficient manner, changes in tax laws, or tax inefficiencies; and

 

   

exposure to wage, price and capital controls, local labor conditions and regulations, including local labor disruptions and rising labor costs which we may be unable to recover in our pricing to customers.

Consequently, our exposure to the conditions in or affecting emerging markets may have an adverse effect on our business, results of operations and financial condition.

We are exposed to fluctuations in foreign currency exchange rates, and our hedging activities may not protect us against the consequences of such fluctuations on our earnings and cash flows.

As a result of our global operations, our business, results of operations and financial condition may be adversely affected by fluctuations in currency exchange rates, most notably the strengthening of the U.S. dollar against the primary foreign currencies, which could adversely impact our revenue growth in future periods. For example, if the U.S. dollar strengthens against other currencies such as the euro, our revenues reported in U.S. dollars would decline. In addition, for U.S. dollar-denominated sales, an increase in the value of the U.S. dollar would increase the real cost to customers of our products in markets outside the United States, which could result in price concessions in certain markets, impact our competitive position or have an adverse effect on demand for our products and consequently on our business, results of operations and financial condition.

 

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Legal compliance issues, particularly those related to our imports/exports and foreign operations, could adversely impact our business.

We are subject to various anti-corruption laws, including the U.S. Foreign Corrupt Practices Act, as amended, that prohibit payments or offers of payments to foreign governments and their officials for the purpose of obtaining or retaining business. We operate in several less-developed countries and regions that are generally recognized as having a greater risk of potentially corrupt business environments. Our legal compliance and ethics programs, including a code of business conduct, policies on anti-bribery, export controls, environmental and other legal compliance, and periodic training to relevant associates on these matters, are designed to reduce the likelihood of a legal compliance violation. Nevertheless, such a violation could still occur, disrupting our business through fines, penalties, diversion of internal resources, negative publicity and possibly severe criminal or civil sanctions.

We are also subject to applicable import laws, export controls and economic sanctions laws and regulations. Changes in import and export control or trade sanctions laws may restrict our business practices, including cessation of business activities in sanctioned countries or with sanctioned entities, and may result in claims for breach of existing contracts and modifications to existing compliance programs and training schedules. Violations of the applicable export or import control, or economic sanctions laws and regulations, such as an export to an embargoed country, or to a denied party, or the export of a product without the appropriate governmental license, may result in penalties, including fines, debarments from export privileges, and loss of authorizations needed to conduct aspects of our international business, and may harm our ability to enter into contracts with our customers who have contracts with the U.S. government. A violation of the laws and regulations enumerated above could have an adverse effect on our business, results of operations and financial condition.

We are subject to risks related to legal claims and proceedings filed by or against us, and adverse outcomes in these matters may materially harm our business.

We are subject to various claims, disputes, investigations, demands, arbitration, litigation, or other legal proceedings. Legal claims and proceedings may relate to labor and employment, commercial arrangements, intellectual property, environmental, health and safety, property damage, theft, personal injury and various other matters. Legal matters are inherently uncertain and we cannot predict the duration, scope, outcome or consequences. In addition, legal matters are expensive and time-consuming to defend, settle, and/or resolve, and may require us to implement certain remedial measures that could prove costly or disruptive to our business and operations. The unfavorable resolution of one or more of these matters could have an adverse effect on our business, results of operations and financial condition.

Our financial performance may suffer if we cannot continue to develop, commercialize or enforce the intellectual property rights on which our businesses depend, some of which are not patented or patentable, or if we are unable to gain and maintain access to relevant intellectual property rights of third parties through license and other agreements.

Our business relies on a substantial portfolio of intellectual property rights, including trademarks, trade secrets, patents, copyrights and other such rights globally. Intellectual property laws and the protection and enforcement of our intellectual property vary by jurisdiction and we may be unable to protect or enforce our proprietary rights adequately in all cases or such protection and enforcement may be unpredictable and costly, which could adversely impact our growth opportunities, financial performance and competitive position. In addition, our intellectual property rights could be challenged, invalidated, infringed or circumvented, or insufficient to take advantage of current market trends or to provide competitive advantage. For our patent filings, because of the existence of a large number of patents in our fields, the secrecy of some pending patent applications, and the rapid rate of issuance of new patents within our applicable fields, it is not economically practical or even possible to determine conclusively in advance whether a product or any of its components infringes the patent rights of others.

 

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We also rely on maintenance of proprietary information (such as trade secrets, know-how and other confidential information) to protect certain intellectual property. Trade secrets and/or confidential know-how can be difficult to maintain as confidential and we may not obtain confidentiality agreements in all circumstances, or individuals may unintentionally or willfully disclose our confidential information improperly. In addition, confidentiality agreements may not provide an adequate remedy in the event of an unauthorized disclosure of our trade secrets or other confidential information, and the enforceability of such confidentiality agreements may vary from jurisdiction to jurisdiction. Furthermore, laws regarding trade secret rights in certain markets where we operate may afford little or no protection to our trade secrets. Failure to obtain or maintain trade secrets, protection of know-how and other confidential information could adversely impact our business.

In addition, we rely on licensing certain intellectual property rights from third parties. For example, many of our software offerings are developed using software components or other intellectual property licensed from third parties, including proprietary and open source licenses. This practice requires that we monitor and manage our use of third-party and open source software components to comply with the applicable license terms and avoid any inadvertent licensing or public disclosure of our intellectual property pursuant to such license terms, and our ability to comply with such license terms may be affected by factors that we can only partially influence or control. The continuation of good licensing relationships with our third-party licensors is important to our business. It is possible that merger or acquisition activity or the granting of exclusive licenses may result in reduced availability and/or a change to the license terms that were previously in place. If any of our third-party licensors are acquired by our competitors, there is a risk that the applicable licensed intellectual property may no longer be available to us or available only on less favorable terms. Loss of our license rights and an inability to replace such software with other third-party intellectual property on commercially reasonable terms, or at all, could adversely impact our business, results of operations and financial condition.

Third-party claims of intellectual property infringement, including patent infringement, are commonplace and successful third-party claims may limit or disrupt our ability to sell our offerings.

Third parties may claim that we, or customers using our products, are infringing their intellectual property rights. For example, patent assertion entities, or non-practicing entities, may purchase intellectual property assets for the purpose of asserting infringement claims and attempting to extract settlements from us. Regardless of the merit of these claims, they can be time-consuming, costly to defend, and may require that we develop or substitute non-infringing technologies, redesign affected products, divert management’s attention and resources away from our business, require us to enter into settlement or license agreements that may not be available on commercially reasonable terms, pay significant damage awards, including treble damages if we were found to be willfully infringing, or temporarily or permanently cease engaging in certain activities or offering certain products or services in some or all jurisdictions, and any of the foregoing could adversely impact our business.

Furthermore, because of the potential for unpredictable significant damage awards or injunctive relief, even arguably unmeritorious claims may be settled for significant amounts of money. In addition, in circumstances in which we are the beneficiary of an indemnification agreement for such infringement claims, the indemnifying party may be unable or unwilling to uphold its indemnification obligations to us. Our customer contracts and certain of our intellectual property license agreements often include obligations to indemnify our customers and licensees against certain claims of intellectual property infringement, and these obligations may be uncapped. If claims of intellectual property infringement are brought against such customers or licensees in respect of the intellectual property rights, products or services that we provide to them, we may be required to defend such customers or licensees and/or pay a portion of, or all, the costs these parties may incur related to such litigation or claims. In addition, our exposure to risks associated with the use of intellectual property may be increased as a result of acquisitions, as we have a lower level of visibility into the development process with respect to such acquired technology or the care taken to safeguard against infringement or similar risks with respect thereto.

 

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We are subject to environmental, health and safety laws and regulations, including regulations related to the composition and takeback of our products and related to our ownership, lease or operation of the facilities in which we operate, and, as a result, may face significant costs or liabilities associated with environmental, health and safety matters.

We are subject to a broad range of foreign and domestic environmental, health and safety laws, regulations and requirements, including those relating to the discharge of regulated materials into the environment, the generation and handling of hazardous substances and wastes, human health and safety, and the content, composition and takeback of our products. For example, the European Union (EU) Restriction on the Use of Certain Hazardous Substances in Electrical and Electronic Equipment Directive and similar laws and regulations of China and other jurisdictions limit the content of certain hazardous materials such as lead, mercury, and cadmium in the manufacture of electrical equipment, including our products. Additionally, the EU, China and other jurisdictions have adopted or proposed versions of the Waste Electrical and Electronic Equipment Directive, which requires producers of electrical and electronic equipment to assume responsibility for collecting, treating, recycling and disposing of products when they have reached the end of their useful life, as well as Registration, Evaluation, Authorization and Restriction of Chemical Substances regulations, which regulate the handling and use of certain chemical substances that may be used in our products.

If we fail to comply with applicable environmental, health and safety laws and regulations, we may face administrative, civil or criminal fines or penalties, the suspension or revocation of necessary permits and requirements to install additional pollution controls. Furthermore, current and future environmental, health and safety laws, regulations and permit requirements could require us to make changes to our operations or incur significant costs relating to compliance. For example, as climate change issues become more prevalent, foreign, federal, state and local governments and our customers have been responding to these issues. The increased focus on environmental sustainability may result in new regulations and customer requirements, or changes in current regulations and customer requirements, which could materially adversely impact our business, results of operations and financial condition. In addition, we handle hazardous materials in the ordinary course of operations and there may be spills or releases of hazardous materials into the environment. We have significant manufacturing facilities in North and South America, in Asia-Pacific and in EMEA. At sites which we own, lease or operate, or have previously owned, leased or operated, or where we have disposed or arranged for the disposal of hazardous materials, we are currently liable for contamination, and could in the future be liable for additional contamination. We have been, and may in the future, be required to participate in the remediation or investigation of, or otherwise bear liability for, such contamination and be subject to claims from third parties whose property damage, natural resources damage or personal injury is caused by such contamination.

We have a limited history of operating as an independent company, and our historical consolidated and unaudited financial information is not necessarily representative of the results that we will achieve as an independent company and may not be a reliable indicator of our future results.

Our historical consolidated and unaudited consolidated financial information included in this proxy statement is not necessarily indicative of our future results of operations, financial condition or cash flows, nor does it reflect what our results of operations, financial condition or cash flows would have been as an independent company during the periods presented. In particular, our historical consolidated financial information included in this proxy statement is not necessarily indicative of our future results of operations, financial condition or cash flows primarily because of the following factors:

 

   

Prior to the Separation in the fiscal fourth quarter of 2016, our business was operated by Emerson as part of its broader corporate organization, rather than as an independent company. During such time, Emerson or one of its affiliates provided support for various corporate functions for us, such as information technology, shared services, medical insurance, procurement, logistics, marketing, human resources, legal, finance and internal audit.

 

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Our historical consolidated financial results reflect the direct, indirect and allocated costs for such services historically provided by Emerson prior to the Separation, and these costs may significantly differ from the comparable expenses we would have incurred as an independent company;

 

   

Prior to the Separation, our working capital requirements and capital expenditures historically were satisfied as part of Emerson’s corporate-wide cash management and centralized funding programs, and our cost of debt and other capital may significantly differ from that which is reflected in our historical combined financial statements for the periods prior to the Separation;

 

   

The historical combined financial information for the periods prior to the Separation may not fully reflect the costs associated with the Separation, including the costs related to being an independent company;

 

   

Our historical combined financial information for the periods prior to the Separation does not reflect our obligations under the various transitional and other agreements that we entered into with Emerson in connection with the Separation; and these historical combined financial results reflect the direct, indirect and allocated costs for such services historically provided by Emerson, and these costs may significantly differ from the comparable expenses we would have incurred as an independent company; and

 

   

Our business was integrated with that of Emerson and, prior to the Separation, we benefitted from Emerson’s size and scale in costs, employees and vendor and customer relationships. Thus, costs we will incur as an independent company may significantly exceed comparable costs we would have incurred as part of Emerson and some of our customer relationships may be weakened or lost.

Please refer to “Selected Consolidated Historical Financial and Other Information of Vertiv Holdings,” “Vertiv Holding’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our historical consolidated and combined financial statements and the notes to those statements included elsewhere in this proxy statement.

We have recorded net losses in the past and may experience net losses in the future.

For the nine months ended September 30, 2019 and 2018 (Successor), the years ended December 31, 2018 and 2017 (Successor), the one month ended December 31, 2016 (Successor) and the years ended September 30, 2015 and 2014 (Predecessor), we recorded consolidated and combined net losses of $106.9 million, $274.3 million, $314.0 million, $369.6 million, $171.2 million, $61.8 million and $235.6 million, respectively. Our future results of operations are uncertain and we may continue to record net losses in future periods.

Our substantial level of indebtedness could adversely affect our financial condition and prevent us from making payments on the Existing Notes, the Senior Secured Credit Facilities and our other debt obligations (if any).

We and our subsidiaries have a substantial amount of debt, including existing outstanding indebtedness under the Existing Notes and the Senior Secured Credit Facilities. At September 30, 2019, and on a pro forma basis after giving effect to the consummation of the Business Combination, we and our subsidiaries would have had approximately $2,060.1 million, including $874.2 million of senior secured debt outstanding, under the no redemption scenario and $2,411.3 million, including $1,240.2 million of senior secured debt outstanding, under the maximum redemption scenario. In addition we would have had $251.3 million of undrawn commitments (which undrawn commitments are available subject to customary borrowing base conditions) under the Asset-Based Revolving Credit Facility, which, if drawn, would be secured. For more information on the effect of our debt on the post-business combination company, see “Unaudited Pro Forma Condensed Combined Financial Information.”

Our substantial level of indebtedness could have important consequences, including making it more difficult for us to satisfy our obligations; increasing our vulnerability to adverse economic and industry conditions;

 

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limiting our ability to obtain additional financing for future working capital, capital expenditures, raw materials, strategic acquisitions and other general corporate requirements; exposing us to interest rate fluctuations because the interest on the debt under the Term Loan Facility and the Asset-Based Revolving Credit Facility is imposed at variable rates; requiring us to dedicate a substantial portion of our cash flow from operations to payments on our debt (including scheduled repayments on the outstanding term loan borrowings under the Term Loan Facility), thereby reducing the availability of our cash flow for operations and other purposes; making it more difficult for us to satisfy our obligations to our lenders, resulting in possible defaults on and acceleration of such indebtedness; limiting our ability to refinance indebtedness or increase the associated costs; requiring us to sell assets to reduce debt or influence our decision about whether to do so; limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate or prevent us from carrying out capital spending that is necessary or important to our growth strategy and efforts to improve operating margins of our business; and placing us at a competitive disadvantage compared to any competitors that have less debt or comparable debt at more favorable interest rates and that, as a result, may be better positioned to withstand economic downturns.

We are subject to fluctuations in interest rates and we do not presently have any existing interest rate swap agreements.

Borrowings under the Term Loan Facility and the Asset-Based Revolving Credit Facility are subject to variable rates of interest and expose us to interest rate risk. At present, we do not have any existing interest rate swap agreements, which involve the exchange of floating for fixed rate interest payments to reduce interest rate volatility. However, we may decide to enter into such swaps in the future. If we do, we may not maintain interest rate swaps with respect to all of our variable rate indebtedness and any swaps we enter into may not fully mitigate our interest rate risk, may prove disadvantageous or may create additional risks.

Despite substantial levels of indebtedness, we and our subsidiaries have the ability to incur more indebtedness. Incurring additional debt could further intensify the risks described above.

We may be able to incur additional debt in the future and the terms of the indentures governing the Existing Notes, and the credit agreements governing the Term Loan Facility and the Asset-Based Revolving Credit Facility will not fully prohibit us and our subsidiaries, as applicable, from doing so. We have the ability to draw upon our $400.0 million Asset-Based Revolving Credit Facility (subject to customary borrowing base limitations) and the ability to increase the aggregate availability thereunder by up to $150.0 million (subject to receipt of commitments). We also have the ability to draw upon the uncommitted accordion provided under the Term Loan Facility, which, as of the date of closing of the Term Loan Facility, permitted incremental term loans thereunder of up to $325.0 million, plus the sum of all voluntary prepayments of the Term Loan Facility and certain permitted indebtedness that is secured on a pari passu basis with the Term Loan Facility, in each case, to the extent not financed with the incurrence of additional long-term indebtedness, plus an unlimited amount so long as the “consolidated first lien net leverage ratio” (as defined in the Term Loan Facility) of Vertiv Group and its restricted subsidiaries, determined on a pro forma basis, would not exceed 3.05:1.00. We have incurred $325.0 million in initial aggregate principal amount of incremental term loans since the closing of the Term Loan Facility. The amount of the Term Loan Facility and the Asset-Based Revolving Credit Facility may be increased if we meet certain conditions. If new debt is added to our current debt levels, the related risks that we now face could intensify and we may not be able to meet all our respective debt obligations. In addition, the Term Loan Facility, the Asset-Based Revolving Credit Facility and the indentures governing the Existing Notes do not prevent us from incurring obligations that do not constitute indebtedness under those agreements.

Restrictive covenants in the indentures governing the Existing Notes and the credit agreements governing the Term Loan Facility and the Asset-Based Revolving Credit Facility could restrict our operating flexibility.

The indentures governing the Existing Notes and the credit agreements governing the Term Loan Facility and the Asset-Based Revolving Credit Facility contain covenants that limit our and our restricted subsidiaries’

 

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ability to take certain actions. These restrictions may limit our ability to operate our businesses, prohibit or limit our ability to enhance our operations or take advantage of potential business opportunities as they arise.

The indentures governing the Existing Notes contain restrictive covenants that, among other things, limit certain of our subsidiaries’ ability to incur additional indebtedness or issue preferred stock; pay dividends, redeem stock or make other distributions; make other restricted payments or investments; create liens on assets; create restrictions on payment of dividends or other amounts by us to our restricted subsidiaries; transfer or sell assets; engage in mergers or consolidations; engage in certain transactions with affiliates; and, in the case of the 2024 Senior Notes only, designate subsidiaries as unrestricted subsidiaries.

The credit agreements governing the Term Loan Facility and the Asset-Based Revolving Credit Facility restrict (subject to customary exceptions), among other things, certain of our subsidiaries’ ability to incur additional indebtedness; pay dividends or other payments on capital stock; guarantee other obligations; grant liens on assets; make loans, acquisitions or other investments; dispose of assets; make optional payments of, or otherwise modify, certain debt instruments; engage in transactions with affiliates; amend organizational documents; engage in mergers or consolidations; enter into arrangements that restrict certain of our subsidiaries’ ability to pay dividends; change the nature of the business conducted by Vertiv Group and its subsidiaries; and designate our subsidiaries as unrestricted subsidiaries.

In addition, under the Asset-Based Revolving Credit Facility, if availability goes below a certain threshold, Vertiv Group and its restricted subsidiaries are required to comply with a minimum “consolidated fixed charge coverage ratio” (as defined in the Asset-Based Revolving Credit Facility).

Our ability to comply with the covenants and restrictions contained in the indentures governing the Existing Notes and the credit agreements governing the Term Loan Facility and the Asset-Based Revolving Credit Facility is not fully within our control and breaches of such covenants or restrictions could trigger adverse consequences.

Our ability to comply with the covenants and restrictions contained in the indentures governing the Existing Notes and the credit agreements governing the Term Loan Facility and the Asset-Based Revolving Credit Facility may be affected by economic conditions and by financial, market and competitive factors, many of which are beyond our control. Our ability to comply with these covenants in future periods will also depend substantially on the pricing and sales volume of our products, our success at implementing cost reduction initiatives and our ability to successfully implement our overall business strategy. The breach of any of these covenants or restrictions could result in a default under the indentures governing the Existing Notes and the credit agreements governing the Term Loan Facility and/or the Asset-Based Revolving Credit Facility that would permit the holders or applicable lenders to declare all amounts outstanding thereunder to be due and payable, together with accrued and unpaid interest and any applicable redemption premium. In that case, the applicable borrowers may be unable to borrow under the Term Loan Facility and the Asset-Based Revolving Credit Facility, may not be able to repay the amounts due under the Term Loan Facility and the Asset-Based Revolving Credit Facility, and may not be able make cash available to us, by dividend, debt repayment or otherwise, to enable us to make payments on the notes. In addition, the lenders under the Term Loan Facility and the Asset-Based Revolving Credit Facility could proceed against the collateral securing that indebtedness. This could have serious consequences to our financial position, results of operations and/or cash flows and could cause us to become bankrupt or insolvent.

Our business plan is dependent on access to funding through the capital markets.

Our ability to invest in our businesses, make strategic acquisitions and refinance maturing debt obligations requires access to the capital markets and sufficient bank credit lines to support short-term borrowings. Volatility in the capital markets may increase costs associated with issuing commercial paper or other debt instruments, or affect our ability to access those markets. Any decline in the ratings of our corporate credit or any indications

 

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from the rating agencies that their ratings on our corporate credit are under surveillance or review with possible negative implications could adversely impact our ability to access capital. If we are unable to continue to access the capital markets, our ability to effectively execute our business plan could be adversely affected, which could have a material adverse effect on our business and financial results. Additionally, if our customers, suppliers or financial institutions are unable to access the capital markets to meet their commitments to us, our business could be adversely impacted.

Risks Related to the Business Combination and GSAH

The Sponsor and each of our officer and directors have agreed to vote in favor of the Business Combination and the other proposals described herein to be presented at the Special Meeting, regardless of how our public stockholders vote.

The Sponsor and each of our officer and directors have agreed to, among other things, vote in favor of the Business Combination Proposal and the other proposals described herein to be presented at the Special Meeting. As of the date of this proxy statement, the Initial Stockholders own approximately 20% of the outstanding shares of our common stock. Accordingly, it is more likely that the necessary stockholder approval will be received than would be the case if our Initial Stockholders agreed to vote their founder shares in accordance with the majority of the votes cast by our public stockholders.

Neither the GSAH Board nor any committee thereof obtained a third party valuation in determining whether or not to pursue the Business Combination.

Neither the GSAH Board nor any committee thereof is required to obtain an opinion from an independent investment banking or accounting firm that the price that we are paying for Vertiv is fair to us from a financial point of view. Neither the GSAH Board nor any committee thereof obtained a third party valuation in connection with the Business Combination. In analyzing the Business Combination, the GSAH Board conducted due diligence on Vertiv. The GSAH Board also consulted with the Company’s management and its legal counsel, financial advisor and other advisors and considered a number of factors, uncertainty and risks, including, but not limited to, those discussed under “Proposal No. 1—Approval of the Business Combination—GSAH’s Board of Directors’ Reasons for the Approval of the Business Combination,” and concluded that the Business Combination was in the best interest of GSAH’s stockholders. Accordingly, investors will be relying solely on the judgment of the GSAH Board in valuing Vertiv, and the GSAH Board may not have properly valued such businesses. The lack of a third party valuation may also lead an increased number of stockholders to vote against the Business Combination or demand redemption of their shares, which could potentially impact our ability to consummate the Business Combination.

 

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Since the Sponsor and the members of GSAH’s management team have interests that are different, or in addition to (and which may conflict with), the interests of our stockholders, a conflict of interest may have existed in determining whether the Business Combination is appropriate as our initial business combination. Such interests include that the Sponsor will lose its entire investment in us if our business combination is not completed.

When you consider the recommendation of our Board in favor of approval of the Business Combination Proposal and the other proposals included herein, you should keep in mind that the Sponsor and our directors have interests in such proposal that are different from, or in addition to, those of our stockholders and warrant holders generally. Our Board was aware of and considered these interests, among other matters, in evaluating and negotiating the Business Combination and transaction agreements and in recommending to our stockholders that they vote in favor of the proposals presented at the Special Meeting, including the Business Combination Proposal. GSAH stockholders should take these interests into account in deciding whether to approve the proposals presented at the Special Meeting, including the Business Combination Proposal. These interests include, among other things:

 

   

If we do not consummate a business combination by June 12, 2020 (or if such date is extended at a duly called meeting of our stockholders, such later date), we would (1) cease all operations except for the purpose of winding up; (2) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (which interest shall be net of taxes payable, and less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any); and (3) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our Board, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. In such event, the 17,250,000 shares of Class B common stock owned by our Initial Stockholders, including the Sponsor, would be worthless because following the redemption of the public shares, we would likely have few, if any, net assets and because the Sponsor and each of our officer and directors have agreed to waive their rights to liquidating distributions from the trust account with respect to such shares if we fail to complete a business combination within the required period. Additionally, in such event, the 10,533,333 private placement warrants that the Sponsor paid $15.8 million for will expire worthless. Certain of our directors, including David M. Cote, have a direct or indirect economic interest in such shares and private placement warrants. The 17,250,000 shares of Class A common stock that the Initial Stockholders will hold following the Business Combination, if unrestricted and freely tradable, would have had aggregate market value of approximately $201.3 million based upon the closing price of $11.67 per share of Class A common stock on the NYSE on January 16, 2020, the most recent practicable date prior to the date of this proxy statement. Given such shares of our common stock will be subject to certain restrictions, we believe such shares have less value. The 10,533,333 private placement warrants that the Sponsor will hold following the Business Combination, if unrestricted and freely tradable, would have had an aggregate market value of approximately $28.4 million based upon the closing price of $2.70 per warrant on the NYSE on January 16, 2020, the most recent practicable date prior to the date of this proxy statement.

 

   

David M. Cote, our Chief Executive Officer, President and Secretary, and Chairman of our Board, is expected to be the Executive Chairman of our Board after the consummation of the Business Combination. Roger Fradin and Steven S. Reinemund, both of whom are our directors, are expected to be on our Board after consummation of the Business Combination. As such, in the future, Mr. Cote, Mr. Fradin and Mr. Reinemund will receive any cash fees, stock options, stock awards or other remuneration that our Board determines to pay to them.

 

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Our existing management team members will be eligible for continued indemnification and continued coverage under a directors’ and officers’ liability insurance policy after the Mergers and pursuant to the Merger Agreement.

 

   

In order to protect the amounts held in the trust account, the Sponsor has agreed that it will be liable to us if and to the extent any claims by a third party (other than our independent registered public accounting firm) for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amount of funds in the trust account to below: (1) $10.00 per public share; or (2) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account due to reductions in the value of the trust assets, in each case, net of the interest which may be withdrawn to pay taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the trust account and except as to any claims under our indemnity of the underwriters of our IPO against certain liabilities, including liabilities under the Securities Act.

 

   

Upon completion of the Business Combination, an aggregate amount of approximately $50 million in deferred underwriting discount, advisory fees and placement agent fees, will be payable to Goldman Sachs & Co. LLC, an affiliate of us and the Sponsor. Additionally, Raanan A. Agus is a Participating Managing Director of Goldman Sachs and one of our directors.

 

   

Affiliates of Goldman Sachs are lenders to Vertiv under the Term Loan Facility and Asset-Based Revolving Credit Facility, with an aggregate of approximately $23.5 million and approximately $16.3 million outstanding to such affiliates in the Term Loan Facility and the Asset-Based Revolving Credit Facility, respectively, as of the date of this proxy statement. We intend to use a portion of the proceeds from the Business Combination, including the PIPE Investment, to repay a portion of the outstanding Term Loan Facility and, as a result, such affiliates would receive their pro rata portion of such proceeds. In addition, as of the date of this proxy statement, affiliates of Goldman Sachs hold an aggregate of approximately $180,000 of the Existing Notes.

 

   

The Sponsor Related PIPE Investors have subscribed for $230 million of the PIPE Investment, for which they will receive up to 23 million shares of our Class A common stock. See “Certain Relationships and Related Persons Transactions—GSAH’s Related Party Transactions—Subscription Agreements.”

 

   

Pursuant to the Amended and Restated Registration Rights Agreement, our Initial Stockholders, the Sponsor Related PIPE Investors and the Vertiv Stockholder will have customary registration rights, including demand and piggy-back rights, subject to cooperation and cut-back provisions with respect to the shares of Class A common stock and warrants held by such parties.

 

   

The New Vertiv Certificate of Incorporation will contain a provision that expressly elects not to be governed by Section 203 (Delaware’s “interested stockholder” statute) of the Delaware General Corporation Law.

The existence of financial and personal interests of one or more of GSAH’s directors may result in a conflict of interest on the part of such director(s) between what he or they may believe is in the best interests of GSAH and its stockholders and what he or they may believe is best for himself or themselves in determining to recommend that stockholders vote for the proposals. See the section entitled “Proposal No.1—Interests of GSAH’s Management Team in the Business Combination” for a further discussion of these considerations.

The financial and personal interests of the Sponsor and Mr. Cote as well as GSAH’s other directors (including those of their respective affiliates) may have influenced their motivation in identifying and selecting Vertiv as a business combination target, completing an initial business combination with Vertiv and influencing the operation of the business following the initial business combination. In considering the recommendations of GSAH’s Board to vote for the proposals, its stockholders should consider these interests.

 

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The exercise of the GSAH management team’s discretion in agreeing to changes or waivers in the terms of the Merger Agreement, including closing conditions, may result in a conflict of interest when determining whether such changes to the terms or waivers of conditions are appropriate and in GSAH’s stockholders’ best interest.

In the period leading up to the closing of the Business Combination, events may occur that, pursuant to the Merger Agreement, would require GSAH to agree to amend the Merger Agreement, to consent to certain actions taken by Vertiv or to waive rights that GSAH is entitled to under the Merger Agreement, including those related to closing conditions. Such events could arise because of changes in the course of Vertiv’ businesses or a request by Vertiv to undertake actions that would otherwise be prohibited by the terms of the Merger Agreement or the occurrence of other events that would have a material adverse effect on Vertiv’ businesses and would entitle GSAH to terminate the Merger Agreement. In any of such circumstances, it would be at GSAH’s discretion, acting through its Board, to grant its consent or waive those rights. The existence of financial and personal interests of one or more of the directors described in the preceding risk factors (and described elsewhere in this proxy statement) may result in a conflict of interest on the part of such director(s) between what he or they may believe is best for GSAH and its stockholders and what he or they may believe is best for himself or themselves in determining whether or not to take the requested action. As of the date of this proxy statement, GSAH does not believe there will be any changes or waivers that GSAH’s management team would be likely to make after stockholder approval of the Business Combination Proposal has been obtained. While certain changes could be made without further stockholder approval, GSAH will circulate a new or amended proxy statement and resolicit GSAH’s stockholders if changes to the terms of the transaction that would have a material impact on its stockholders are required prior to the vote on the Business Combination Proposal.

We and Vertiv will incur significant transaction and transition costs in connection with the Business Combination.

We and Vertiv have both incurred and expect to incur significant, non-recurring costs in connection with consummating the Business Combination and operating as a public company following the consummation of the Business Combination. We and Vertiv may also incur additional costs to retain key employees. Certain transaction expenses incurred in connection with the Merger Agreement (including the Business Combination), including all legal, accounting, consulting, investment banking and other fees, expenses and costs, will be for the account of, or paid by, the party incurring such fees, expenses and costs, or otherwise paid by the Company following the closing of the Business Combination.

The Company’s transaction expenses as a result of the Business Combination are currently estimated at approximately $50 million in deferred underwriting discount, advisory fees and placement agent fees payable to Goldman Sachs & Co. LLC, an affiliate of us and the Sponsor. The amount of the deferred underwriting discount will not be adjusted for any shares that are redeemed in connection with the Business Combination. The per-share amount we will distribute to stockholders who properly exercise their redemption rights will not be reduced by the deferred underwriting discount and after such redemptions, the per-share value of shares held by non-redeeming stockholders will reflect our obligation to pay the deferred underwriting discount.

The Vertiv Stockholder will have significant influence over us after completion of the Business Combination.

Upon completion of the Business Combination, the Vertiv Stockholder will beneficially own approximately 37.8% of our Class A common stock. As long as the Vertiv Stockholder owns or controls a significant percentage of our outstanding voting power, it will have the ability to significantly influence all corporate actions requiring stockholder approval, including the election and removal of directors and the size of our Board, any amendment to our certificate of incorporation or bylaws, or the approval of any merger or other significant corporate transaction, including a sale of substantially all of our assets. The Vertiv Stockholder’s influence over the post-business combination company’s management could have the effect of delaying or preventing a change in control or otherwise discouraging a potential acquirer from attempting to obtain control of the post-business combination

 

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company, which could cause the market price of our Class A common stock to decline or prevent stockholders from realizing a premium over the market price for our Class A common stock. Because the New Vertiv Certificate of Incorporation will opt out of Section 203 of the General Corporation Law of the State of Delaware (the “DGCL”) regulating certain business combinations with interested stockholders, the Vertiv Stockholder may transfer shares to a third party by transferring their common stock without the approval of our Board or other stockholders, which may limit the price that investors are willing to pay in the future for shares of our common stock. Pursuant to the Stockholders Agreement entered into by and among the Company, the Sponsor and the Vertiv Stockholder, the Vertiv Stockholder will initially have the right to nominate up to four directors (at least two of whom will be independent) to the post-business combination company’s Board. The Vertiv Stockholder’s right to nominate directors to the post-closing company’s Board is subject to its ownership percentage of the total outstanding shares of Class A common stock. If the Vertiv Stockholder holds: (1) 30% or greater of the outstanding Class A common stock, it will have the right to nominate four directors (at least two of whom will be independent); (2) less than 30% but greater than or equal to 20% of the outstanding Class A common stock, it will have the right to nominate three directors (at least one of whom will be independent); (3) less than 20% but greater than or equal to 10% of the outstanding Class A common stock, it will have the right to nominate two directors (none of whom will be required to be independent); (4) less than 10% but greater than or equal to 5% of the outstanding Class A common stock, it will have the right to nominate one director (none of whom will be required to be independent); and (5) less than 5% of the outstanding Class A common stock, it will not have the right to nominate any directors.

The Vertiv Stockholder’s interests may not align with our interests as a company or the interests of our other stockholders. Accordingly, the Vertiv Stockholder could cause us to enter into transactions or agreements of which you would not approve or make decisions with which you would disagree. Further, the Vertiv Stockholder is in the business of making investments in companies and may acquire and hold interests in businesses that compete directly or indirectly with us. The Vertiv Stockholder may also pursue acquisition opportunities that may be complementary to our business, and, as a result, those acquisition opportunities may not be available to us. In recognition that principals, members, directors, managers, partners, stockholders, officers, employees and other representatives of the Vertiv Stockholder and its affiliates and investment funds may serve as our directors or officers, the New Vertiv Certificate of Incorporation provides, among other things, that none of the Vertiv Stockholder or any principal, member, director, manager, partner, stockholder, officer, employee or other representative of the Vertiv Stockholder has any duty to refrain from engaging directly or indirectly in the same or similar business activities or lines of business that we do. In the event that any of these persons or entities acquires knowledge of a potential transaction or matter which may be a corporate opportunity for itself and us, we will not have any expectancy in such corporate opportunity, and these persons and entities will not have any duty to communicate or offer such corporate opportunity to us and may pursue or acquire such corporate opportunity for themselves or direct such opportunity to another person. These potential conflicts of interest could have a material adverse effect on our business, financial condition and results of operations if, among other things, attractive corporate opportunities are allocated by the Vertiv Stockholder to itself or its other affiliates.

We will be required to pay the Vertiv Stockholder for a significant portion of the tax benefits relating to pre-Business Combination tax assets and attributes, regardless of whether any tax savings are realized.

At the closing of the Business Combination, we will enter into the Tax Receivable Agreement, substantially in the form attached as Annex F to this proxy statement. The Tax Receivable Agreement will generally provide for the payment by us to the Vertiv Stockholder of 65% of the cash tax savings in U.S. federal, state, local and certain foreign taxes, that we actually realize (or are deemed to realize) in periods after the closing of the Business Combination as a result of (i) increases in the tax basis of certain intangible assets of Vertiv resulting from certain pre-Business Combination acquisitions, (ii) certain U.S. federal income tax credits for increasing research activities (so-calledR&D credits”) and (iii) tax deductions in respect of certain Business Combination expenses. We expect to retain the benefit of the remaining 35% of these cash tax savings. The payments described in (i) and (ii) above will generally be deferred until the close of our third taxable year following the closing of the Business Combination and will be payable over the following nine taxable years. The payments

 

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described in (iii) above will generally be deferred until the close of our fourth taxable year following the closing of the Business Combination and will be payable ratably over the following three taxable years regardless of whether we actually realize such tax benefits in such years.

Under certain circumstances (including a material breach of our obligations, certain actions or transactions constituting a change of control, a divestiture of certain assets, upon the end of the term of the Tax Receivable Agreement or after three years, at our option), payments under the Tax Receivable Agreement will be accelerated and become immediately due. In such case, the payments due upon acceleration would be based on the present value of our anticipated future tax savings using certain valuation assumptions, including that we and our subsidiaries will generate sufficient taxable income to fully utilize the applicable tax assets and attributes covered under the Tax Receivable Agreement (or, in the case of a divestiture of certain assets, the applicable tax attributes relating to such assets). Consequently, it is possible in these circumstances that the actual cash tax savings realized by us may be significantly less than the corresponding Tax Receivable Agreement payments we are required to make at the time of acceleration. Furthermore, the acceleration of our obligations under the Tax Receivable Agreement could have a substantial negative impact on our liquidity. Additionally, the obligation to make payments under the Tax Receivable Agreement, including the acceleration of our obligation to make payments in the event of a change of control, could make us a less attractive target for a future acquisition.

While the timing of any payments under the Tax Receivable Agreement will vary depending upon the amount and timing of our taxable income, we expect that the payments that we will be required to make under the Tax Receivable Agreement could be substantial. Payments under the Tax Receivable Agreement will be based on the tax reporting positions that we determine, and such tax reporting positions are subject to challenge by taxing authorities. Payments made under the Tax Receivable Agreement will not be returned upon a successful challenge by a taxing authority to our reporting positions, although such excess payments made to the Vertiv Stockholder may be netted against payments otherwise to be made to the Vertiv Stockholder after our determination of such excess. Any payments made by us under the Tax Receivable Agreement will generally reduce the amount of overall cash flow that might have otherwise been available to us.

For more information about the Tax Receivable Agreement, please see the section entitled “Proposal No. 1—Approval of the Business Combination—Related Agreement—Tax Receivable Agreement.”

The announcement of the proposed Business Combination could disrupt Vertiv’s relationships with its customers, suppliers, joint venture partners and others, as well as its operating results and business generally.

Whether or not the Business Combination and related transactions are ultimately consummated, as a result of uncertainty related to the proposed transactions, risks relating to the impact of the announcement of the Business Combination on Vertiv’s business include the following:

 

   

its employees may experience uncertainty about their future roles, which might adversely affect Vertiv’s ability to retain and hire key personnel and other employees;

 

   

customers, suppliers, joint venture partners and other parties with which Vertiv maintains business relationships may experience uncertainty about its future and rescind their deposits, seek alternative relationships with third parties, seek to alter their business relationships with Vertiv. or fail to extend an existing relationship with Vertiv; and

 

   

Vertiv has expended and will continue to expend significant costs, fees and expenses for professional services and transaction costs in connection with the proposed Business Combination.

If any of the aforementioned risks were to materialize, they could lead to significant costs which may impact Vertiv’s results of operations and cash available to fund its businesses.

 

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Subsequent to consummation of the Business Combination, we may be exposed to unknown or contingent liabilities and may be required to subsequently take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on our financial condition, results of operations and the price of our securities, which could cause you to lose some or all of your investment.

We cannot assure you that the due diligence conducted in relation to Vertiv has identified all material issues or risks associated with Vertiv, its business or the industry in which it competes. Furthermore, we cannot assure you that factors outside of Vertiv’s and our control will not later arise. As a result of these factors, we may be exposed to liabilities and incur additional costs and expenses and we may be forced to later write-down or write-off assets, restructure our operations, or incur impairment or other charges that could result in our reporting losses. Even if our due diligence has identified certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with our preliminary risk analysis. If any of these risks materialize, this could have a material adverse effect on our financial condition and results of operations and could contribute to negative market perceptions about our securities or the post-business combination company. Additionally, we have no indemnification rights against the Vertiv Stockholder under the Merger Agreement and all of the purchase price consideration will be delivered to the Vertiv Stockholder at the closing of the Business Combination, except as set forth in the Escrow Agreement.

The Company bound a representation and warranty insurance policy and related excess policies (collectively, the “R&W Insurance Policy”) with certain insurers (the “Insurers”) on December 26, 2019, pursuant to which the Insurers will indemnify the Company for losses incurred by the Company arising out of: (i) any breach of Vertiv’s or the Vertiv Stockholder’s representations and warranties in the Merger Agreement or in certain certificates and instruments provided to the Company by Vertiv and the Vertiv Stockholder in connection with the Business Combination and (ii) any pre-closing taxes of Vertiv, in each case, subject to exclusions and other terms in the R&W Insurance Policy. However, issuance of the final R&W Insurance Policy is subject to the satisfaction of various conditions on or after the closing of the Business Combination. There is no guarantee that the final R&W Insurance Policy will be issued by the Insurers.

Accordingly, any stockholders or warrant holders of GSAH who choose to remain our stockholders or warrant holders following the Business Combination could suffer a reduction in the value of their shares, warrants and units. Such stockholders or warrant holders are unlikely to have a remedy for such reduction in value.

The historical financial results of Vertiv and unaudited pro forma financial information included elsewhere in this proxy statement may not be indicative of what our actual financial position or results of operations would have been.

The historical financial results of Vertiv included in this proxy statement do not reflect the financial condition, results of operations or cash flows they would have achieved as a public company during the periods presented or those we will achieve in the future. The post-business combination company’s financial condition and future results of operations could be materially different from amounts reflected in its historical financial statements included elsewhere in this proxy statement, so it may be difficult for investors to compare the post-business combination company’s future results to historical results or to evaluate its relative performance or trends in its business.

Similarly, the unaudited pro forma financial information in this proxy statement is presented for illustrative purposes only and has been prepared based on a number of assumptions including, but not limited to, GSAH being treated as the “acquired” company for financial reporting purposes in the Business Combination, the total debt obligations and the cash and cash equivalents of Vertiv on the date the Business Combination closes and the number of our public shares that are redeemed in connection with the Business Combination. Accordingly, such pro forma financial information may not be indicative of the post-business combination company’s future operating or financial performance and the post-business combination company’s actual financial condition and

 

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results of operations may vary materially from the pro forma results of operations and balance sheet contained elsewhere in this proxy statement, including as a result of such assumptions not being accurate. See “Selected Unaudited Pro Forma Condensed Combined Financial Information.”

We currently intend to only complete one Business Combination with the proceeds of our IPO and the sale of the private placement warrants, which will cause us to be solely dependent on Vertiv’s business. This lack of diversification may negatively impact our operations and profitability.

We currently intend to only complete one Business Combination with the proceeds of our IPO and the sale of the private placement warrants. By completing our Business Combination with only a single entity our lack of diversification may subject us to numerous economic, competitive and regulatory risks. Further, we would not be able to diversify our operations or benefit from the possible spreading of risks or offsetting of losses, unlike other entities which may have the resources to complete several business combinations in different industries or different areas of a single industry. Accordingly, the prospects for our success will be solely dependent upon the business and financial performance of Vertiv.

This lack of diversification may subject us to numerous economic, competitive and regulatory risks, any or all of which may have a substantial adverse impact upon the particular industry in which we may operate subsequent to the Business Combination. See “—Risks Related to Vertiv’s Business” for risks we may face as a result of consummating the Business Combination with Vertiv.

We have a minimum cash requirement. This requirement may make it more difficult for us to complete the Business Combination as contemplated.

The Merger Agreement provides that the Vertiv Stockholder’s obligation to consummate the Business Combination is conditioned on, among other things, the Minimum Required Funds Condition, which requires that, as of the closing of the Business Combination, the aggregate amount of cash contained in the trust account less the aggregate amount of all payments required to be made by GSAH in connection with redemptions plus the proceeds paid to GSAH upon consummation of the PIPE Investment, as adjusted pursuant to the Merger Agreement, shall equal or exceed $1,375,000,000.

In addition, pursuant to the GSAH Certificate of Incorporation, in no event will we redeem public shares in an amount that would cause our net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) to be less than $5,000,001. If such conditions are not met, and such conditions are not or cannot be waived under the terms of the Merger Agreement, then the Merger Agreement could terminate a