- Vertiv is paying $1.45 billion in cash at closing for UtilityInnovation Group, with up to $1.15 billion more contingent on earnings targets over the next 12 and 24 months, for total consideration of up to $2.6 billion.
- The acquisition adds microgrid design, on-site generation, energy storage orchestration and behind-the-meter power architecture, moving Vertiv upstream to the grid interconnect and covering the power value chain from grid to chip.
- Vertiv funds the $1.45 billion initial payment from $5.6 billion of liquidity and expects the deal to be accretive to adjusted EPS in its first year.
- VRT fell 5.9% to about $273.66 on below-average volume of roughly 1.5 million shares versus a 6.47 million average, with the decline attributed to high valuation and acquisition execution, integration and valuation risk.
- Analyst consensus stands at Moderate Buy with a $357.83 target price; Jefferies maintained a Hold rating, and Vertiv reported 24.1% year-over-year revenue growth with quarterly revenue below expectations.
Quotes
“For AI data center operators, competitive advantage increasingly depends on how quickly they can move from site selection to first token”
“The decline comes as investors weigh the company’s high valuation and recent acquisition risks.”
“boost adjusted earnings per share in its first year”