CORTNP 9¼ 10/15/24

Vertiv Group Corporation

Credit, Industrial/Transportation


Publicly traded companies mentioned herein: Eaton Corporation PLC (ETN), Emerson Electric Co (EMR),Schneider Electric SE (SU FP)

Highlights

The presenter is long Vertiv Group’s 9.25s (99.76) and 12s (~98). He sees the “industrial/tech hybrid” - formerly known as Emerson Network Power - as a cheap high yield play lacking in controversy. In August 2016, Emerson announced that it was selling what is now Vertiv to Platinum Equity in a $4B deal financed with bank debt (~$2B) and a $750MM 9¼ bond. In early 2017, Vertiv raised $500MM via the 12% holdco PIK note due in 2022, with most of the proceeds going to pay a dividend. In his opinion, the debt is “easily” covered as fundamentals are sound, and patient investors could see attractive returns (15% - 20%+) if Platinum is gearing up for a 2019 - 2020 exit (via IPO or sale of the business).

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Idea Discussion

Commentor 1 - 2 weeks ago

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