Platinum Equity is exploring a potential sale or initial public offering of Vertiv, a provider of backup power and fail-safe systems for data centers, which its private equity owner hopes will value the company close to at least $6 billion, according to sources familiar with the matter.
A successful deal would reflect the rapid growth of the data center industry. The sector has been experiencing significant demand as corporations continue to plow resources into cloud computing, which requires infrastructure such as Vertiv’s offerings, to support it.
Platinum Equity has hired investment banks Goldman Sachs (GS.N) and JPMorgan Chase & Co (JPM.N) to assist in the process, the sources added, asking not to be named because the matter is private.
There is no guarantee that a deal will be reached and Platinum Equity’s plans could still change, the people cautioned.
Platinum Equity, Vertiv, Goldman Sachs and JP Morgan declined to comment.
Vertiv has been conducting informal meetings with a number of prospective bidders, including private equity firms, the people added. The company is expected to have earnings before interest, tax, depreciation and amortization this year of more than $560 million, the sources added.
Platinum Equity acquired the former network power business from Emerson Electric (EMR.N) less than two years ago for about $4 billion, in one of the largest deals the Los Angeles-based firm had ever completed.
Emerson kept a minority interest in the company, according to a statement at the time. Emerson declined to comment.
Based in Columbus, Ohio, Vertiv manufactures systems and provides maintenance for backup power and other safety systems to data centers, communication networks, and commercial and industrial environments.
Vertiv’s discussions come at the same time that its customers consolidate. Last year saw more data center assets transact than in the previous two years combined, making it the biggest year ever for data center acquisitions, according to Synergy Research Group.
The company was renamed Vertiv in December 2016, and Rob Johnson, a former operating partner at venture capital firm Kleiner Perkins Caufield & Byers, was named CEO.
Source: Reuters.com