Vertiv Holdings completes $1.45 billion cash purchase of Utility Innovation Holdings

Up to $1.15 billion more may be paid in two parts, depending on whether the business meets certain EBITDA targets.

Vertiv Holdings has completed its acquisition of Utility Innovation Holdings, which operates as UtilityInnovation Group. Its subsidiary, Vertiv Corporation, paid about $1.45 billion in upfront cash. The deal closed on Tuesday.

UtilityInnovation Group makes microgrid systems, advanced power controls and behind-the-meter power equipment for data centers. Behind-the-meter systems sit on the customer's side of the utility meter. Vertiv expects the deal to add to adjusted earnings per share in the first year after completion.

The purchase also includes up to $1.15 billion in contingent payments. These are paid in two parts if the business meets certain EBITDA targets, a measure of operating profit before interest, taxes, depreciation and amortization.

On Monday, Vertiv bought King Environmental, which extended its thermal management services into Europe, the Middle East and Africa. Vertiv did not disclose the terms of that deal, and it was not material to the company. The UtilityInnovation purchase is far larger. It signals a bigger bet on power infrastructure than on service capacity. Paired with existing thermal management assets, microgrid and behind-the-meter capability points to a wider push by Vertiv to control more of the power and cooling systems inside data centers. The expected near-term gain in adjusted earnings per share gives investors a clear benchmark to track as the business is integrated.