Vertiv Holdings to Restate 2020 Results Due to SEC Guidance for SPAC Warrant Accounting

By Josh Beckerman

Vertiv Holdings Co. will restate its 2020 results due to Securities and Exchange Commission guidance for warrant accounting for special-purpose acquisition companies.

In February 2020, the digital infrastructure company merged with a SPAC backed by Goldman Sachs Group Inc.

On April 12, the SEC said that under certain circumstances, warrants should be classified as liabilities, rather than as equity.

Several companies have delayed their 2020 annual reports as they review SEC guidance, including Tekkorp Digital Acquisition Corp., Mallard Acquisition Corp., Blue Water Acquisition Corp., Better World Acquisition Corp. and Edoc Acquisition Corp.

Discussing public and private placement warrants that were outstanding at the time of the merger, Vertiv said that "consistent with market practice among SPACs, we had been accounting for the warrants as equity under a fixed accounting model." Given the SEC's April 12 statement, it will restate financial statements "such that the warrants are accounted for as liabilities and marked-to-market each reporting period."

As a result of the restatement and the increase in its stock price over the applicable period, Vertiv expects to recognize incremental 2020 non-operating expense between $140 million to $160 million. There will be no impact to previously reported net cash flow.

Write to Josh Beckerman at [e-mail]

(END) Dow Jones Newswires

April 22, 2021 19:50 ET (23:50 GMT)

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