Flex agrees to buy power-equipment maker EPC Power for $4.4 billion

Flex Ltd., the Austin, Texas-based manufacturing conglomerate, said Thursday it has agreed to buy EPC Power Corp., a privately held maker of power-conversion equipment for data centers and electric grids, for $4.4 billion in cash. The deal, disclosed in a filing with the Securities and Exchange Commission, is one of the largest acquisitions this year tied directly to the physical infrastructure needed to power artificial intelligence data centers, rather than the chips or software that run inside them.

Under the terms of the agreement, Flex will acquire all of the equity of EPC Power, a Poway, California-based company founded in 2010 that designs power-conversion hardware and software used to convert and stabilize electricity for large data centers, utility-scale battery storage and microgrids. The transaction is expected to close in the fourth quarter of calendar 2026, subject to regulatory approval and customary closing conditions.

The numbers

EPC Power is projected to generate roughly $800 million in revenue in calendar 2026, according to the companies' joint announcement. Flex said it expects the business to post organic revenue growth of approximately 40% in 2027, with EBITDA margin expanding by double-digit percentage points to around 30% over the same period. The company has deployed more than 15 gigawatts of power-conversion capacity across 62 countries and has expanded its domestic manufacturing footprint nearly tenfold over the past four years, with U.S. production capacity expected to exceed 30 gigawatts in 2027, per the companies.

Flex plans to fund the purchase with a mix of debt and equity, backed by committed debt financing from Bank of America and Citi, according to the exhibit attached to Flex's regulatory filing. EPC Power's financial advisers on the sale were Goldman Sachs & Co. and J.P. Morgan Securities, and its legal counsel was Vinson & Elkins.

How the deal came together

EPC Power has been majority-owned by the private-equity arms of Goldman Sachs Alternatives and Cleanhill Partners, which will exit their stake as controlling shareholders once the sale closes, the company said in its own announcement of the sale. Devin Dilley, the company's co-founder, president and chief innovation officer, said the growth achieved under that ownership period reflected work building out manufacturing capacity to meet surging demand from data-center operators racing to add computing power for AI workloads.

The acquisition also fits into a broader restructuring already under way at Flex. In a separate announcement made in May, Flex said it intended to spin off its Cloud and Power Infrastructure segment into a standalone, independent publicly traded company, a move the company said would sharpen strategic focus for both the new entity and the remaining manufacturing business, which serves the healthcare, industrial, automotive and communications markets. EPC Power is set to become part of that Cloud and Power Infrastructure segment immediately, meaning the newly acquired business will be folded into the spin-off, targeted for completion in the first quarter of calendar 2027, rather than staying with Flex's core manufacturing operations long-term.

That timeline means EPC Power's roughly four-year run under private-equity ownership, during which it says it grew manufacturing capacity nearly tenfold, is ending just as it becomes a founding asset of a new, separately traded power-infrastructure company. Flex has said it expects to retain an ownership stake of no more than 19.9% in that spin-off once it separates.

The immediate parties are EPC Power's roughly 62 countries' worth of customers, which include operators of data centers and utility-scale battery-storage projects that rely on its power-conversion systems, and Flex shareholders, who will see the acquisition folded into the company being carved out next year rather than into Flex's continuing manufacturing business. EPC Power's technology is built around what the company calls Agile Grid Forming capabilities, hardware and software that allow data centers and storage sites to draw power more efficiently and to help stabilize the electric grid during periods of high demand — a capability increasingly sought after as utilities and grid operators from Texas to the mid-Atlantic warn that AI-driven electricity demand is straining transmission capacity.

Rivals in the power-equipment and data-center infrastructure supply chain, including established players in electrical switchgear, transformers and backup power systems, are also affected, as the deal signals that manufacturers are willing to pay a premium — EPC Power's price tag is roughly 5.5 times its projected 2026 revenue — for companies with proven, at-scale manufacturing capacity rather than newer entrants still building out production lines.

What the companies are saying

Flex chief executive Revathi Advaithi, who is set to lead the spun-off power-infrastructure company once the separation is complete, framed the purchase as a response to a structural change in how data centers are built and powered.

"A generational shift in power architecture is underway, driven by rising power density and the changing demands of digital infrastructure."

EPC Power chief executive Jim Fusaro said the combination reflected the scale of engineering now required to keep pace with AI infrastructure buildouts, telling the companies' joint announcement that "as demand for AI infrastructure accelerates, customers need power systems that are more intelligent, efficient and resilient." Neither company has disclosed how many of EPC Power's employees will be retained after the deal closes or whether any manufacturing sites will be consolidated with Flex's existing power-infrastructure operations.

What happens next

The transaction still requires customary closing conditions and regulatory clearance before it can close, which the companies expect in the fourth quarter of this year. Because EPC Power is being folded directly into the business Flex intends to spin off in early 2027, the acquisition's ultimate financial impact will be reported by the new, independent company rather than by Flex's continuing operations once the separation takes effect. Investors will get a clearer picture of how the combined power-infrastructure business is performing when Flex provides further detail on the spin-off's structure and finances ahead of that expected first-quarter 2027 completion date. In the meantime, the deal adds to a run of large, infrastructure-focused acquisitions this year as industrial manufacturers reposition around the physical buildout of AI computing capacity rather than the software or chips that depend on it.