Research Update: Vertiv Group Corp. Upgraded To 'BB' On Strong Operating Performance And Updated Financial Policy; Outlook Positive

We expect power and thermal management equipment and service provider Vertiv Group Corp.'s EBITDA to nearly double this year due to solid demand, improvements in the company's ability to manage price and cost, and benefits from an easing supply chain. We forecast S&P Global Ratings-adjusted debt leverage will improve to the mid-2x area at the end of 2023, from 5.3x at the end of 2022, and improve further toward the low-2x area in 2024--a level that provides good cushion relative to our 4x downside threshold at the current 'BB' rating. Our forecast for S&P Global Ratings-adjusted debt leverage assumes continued EBITDA and free operating cash flow (FOCF) growth to a level that will be sufficient to support returns to shareholders,

...- We expect power and thermal management equipment and service provider Vertiv Group Corp.'s EBITDA to nearly double this year due to solid demand, improvements in the company's ability to manage price and cost, and benefits from an easing supply chain. - We forecast S&P Global Ratings-adjusted debt leverage will improve to the mid-2x area at the end of 2023, from 5.3x at the end of 2022, and improve further toward the low-2x area in 2024--a level that provides good cushion relative to our 4x downside threshold at the current '##' rating. - Our forecast for S&P Global Ratings-adjusted debt leverage assumes continued EBITDA and free operating cash flow (FOCF) growth to a level that will be sufficient to support returns to shareholders, and merger and acquisition (M&A) spending that reflects the company's capital allocation plans and updated net leverage target, which was communicated during the company's recent investor day. - Therefore, we raised our by ratings one notch, including our...

Research Update