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Tecogen Inc . (OTCQX: OTC:TGEN), a manufacturer specializing in air conditioning and heating equipment, announced today that it has entered into a sales and marketing agreement with Vertiv Corporation (NYSE: VRT), a leader in data center cooling solutions with a market capitalization of $35.6 billion. According to InvestingPro data, Vertiv has demonstrated strong growth with revenue increasing 16.74% over the last twelve months. This strategic partnership aims to leverage Tecogen’s DTx Chillers for cooling applications in data centers.
The agreement, effective from March 1, 2025, spans a two-year period, within which Vertiv will actively market and sell Tecogen’s chillers. Vertiv has committed to establishing a marketing budget and employing commercially reasonable efforts to promote the Tecogen Chillers. Additionally, the two companies will negotiate a definitive supply agreement, which is a future milestone of their collaboration. Vertiv brings significant financial strength to this partnership, with InvestingPro analysis showing a healthy current ratio of 1.65 and strong operational metrics.
Under the terms of the agreement, Vertiv will have the exclusive right to market and sell Tecogen Chillers for data center cooling outside the United States and a non-exclusive right within the U.S. If Vertiv achieves certain sales targets, it will also gain exclusive U.S. marketing and sales rights. In return, Tecogen has agreed to offer Vertiv volume discounts and support in securing favorable terms for components and supplies needed for manufacturing the chillers.
The partnership is positioned as a strategic move to expand Tecogen’s footprint in the data center cooling market, a segment with increasing demand due to the global expansion of data centers. The agreement also contemplates termination by either party if a definitive supply agreement is not reached.
The details of the agreement were disclosed in a filing with the Securities and Exchange Commission, and the full text of the agreement has been filed as an exhibit to Tecogen’s Current Report on Form 8-K.
This alliance with Vertiv marks a significant step for Tecogen as it looks to diversify its product applications and capitalize on the growing needs of the data center industry. While Vertiv currently trades at a relatively high P/E ratio of 71.89, InvestingPro analysis reveals multiple additional insights about the company’s valuation and growth prospects, with over 15 exclusive ProTips available to subscribers. The information is based on a press release statement and InvestingPro research, which offers comprehensive analysis through its Pro Research Reports covering over 1,400 US stocks.
In other recent news, Vertiv Holdings (NYSE:VRT) Co. reported its fourth-quarter 2024 earnings, exceeding Wall Street expectations with an adjusted earnings per share (EPS) of $0.99, compared to the forecasted $0.82. The company’s revenue also surpassed projections, reaching $2.35 billion against the anticipated $2.16 billion. This strong performance was highlighted by a 27% organic sales growth in the quarter, marking a significant achievement for Vertiv. Despite these positive results, Vertiv’s stock experienced a decline, which analysts suggest may be due to broader market dynamics.
JPMorgan maintained its Overweight rating on Vertiv, with a price target of $132, following the company’s robust fourth-quarter performance. The firm noted that Vertiv’s sales, margins, and free cash flow exceeded expectations, demonstrating effective execution. Analysts at JPMorgan remain optimistic about Vertiv’s financial achievements and outlook, particularly given the company’s strategic focus on AI-driven data center infrastructure investments.
The company’s financial stability was further underscored by a reduction in net leverage to 1x, emphasizing improved financial health. Vertiv’s commitment to innovation is evident in its $50 million investment in research and development, supporting its competitive edge in the market. As the market anticipates Vertiv’s future earnings reports, investors will closely watch the company’s ability to sustain its growth trajectory and meet or exceed earnings expectations.
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