Global critical digital infrastructure and continuity solutions provider, Vertiv announced that through its subsidiaries, the company has agreed to E&I Engineering Ireland Limited and its affiliate, Powerbar Gulf for approximately $1.8 billion in upfront consideration plus the potential for up to $200 million in cash, based on achieving certain 2022 profit milestones. It consists of $1,170 million in cash and approximately $630 million of Vertiv common stock.
Electrical switchgear and power distribution systems
E&I Engineering is an independent electrical switchgear and power distribution systems provider that has pioneered unique in-house integrated power solution designs and technology tailored to individual client project needs. The company was founded in 1986 by Philip O’Doherty. E&I has 2,100 employees with annual sales of approximately $460 million. Vertiv stated that compelling strategic and financial benefits of the acquisition are:
- Highly Complementary Product Portfolio with Differentiated Technology. E&I’s products in critical power switchgear, UPS input and output switch gear and busway fill the remaining gaps in the Vertiv critical power infrastructure offering.
- Broad Global Customer Base. Together, Vertiv and E&I will serve some of the world’s leading hyperscale cloud and colocation companies that are increasingly looking to suppliers to have a full “powertrain” capability and flexible power deployment options to support increasingly demanding power requirements.
- Significant Geographic Expansion Potential. E&I today competes in North America, Europe and the Middle East. This transaction provides the opportunity to leverage Vertiv’s footprint outside of the United States, particularly in Europe and Asia to rapidly expand penetration with new customers.
- Attractive Cost and Revenue Synergies. The combination is expected to yield excellent sales synergies; however no sales synergies are contemplated in the base financial model so they represent incremental upside. Vertiv expects to realize approximately $18 million in pre-tax run rate cost synergies within three years of close. Cost synergies will come from a combination of procurement, general, administrative and product costs. Revenue synergy opportunities are driven by highly complementary customers and products to support cross-selling and integrated solutions for each company’s customers.
- Accretive to Vertiv’s Financial Profile. The transaction is expected to be accretive to Vertiv’s organic growth, adjusted operating margins, cash flow and EPS in 2022.
Rob Johnson, Chief Executive Officer of Vertiv said,
“The acquisition of E&I represents a key milestone in Vertiv’s strategy, completing our portfolio of in-building power train offerings for data centers and vital commercial and industrial markets. The combination will amplify Vertiv’s growth opportunities and profitability, while enabling Vertiv to deliver differentiated solutions that manage a customer’s entire power infrastructure as an integrated system. We look forward to adding E&I’s highly skilled team members to the Vertiv family. Our companies share a strong culture of engineering excellence and innovation and a passion for serving our customers with differentiated products and service.”