Flex Pays $4.4 Billion for EPC Power Ahead of Spinning Off Its Data-Centre Unit
The contract manufacturer is buying a California power-conversion specialist with ~$800 million of 2026 revenue and 40% growth, then plans to list the enlarged infrastructure business in early 2027.
What Happened
Flex has agreed to acquire EPC Power for $4.4 billion in cash, subject to customary adjustments, the company announced on 3 September. Founded in 2010 and headquartered in California, EPC Power builds intelligent power-conversion systems for data centres and grid applications, including rectifiers and DC-DC conversion, with development planned in solid-state transformers. Its platform is engineered for next-generation 800-volt data-centre architectures designed to deliver power more efficiently to high-density AI infrastructure.
EPC is expected to generate roughly $800 million of revenue in calendar 2026, with organic growth of about 40% in 2027 and EBITDA margins expanding by double-digit percentage points to around 30%. The deal is expected to close in the fourth quarter, at which point EPC becomes part of Flex’s Cloud and Power Infrastructure segment. Flex intends to separate that segment into an independent public company in the first calendar quarter of 2027.
Flex disclosed the agreement in a filing with the SEC the same day. The deal came on the same day Nvidia confirmed its $12.93 billion purchase of Hugging Face, underlining how much of this year’s M&A is being driven by the physical and software infrastructure behind AI.
Why It Matters
Flex is building the spin-off before it lists. Announcing a $4.4 billion acquisition months ahead of separating the same segment is deliberate: the enlarged Cloud and Power Infrastructure business will come to market with a faster-growing, higher-margin profile than Flex’s traditional contract-manufacturing operations. EPC’s 30% margin trajectory is precisely the kind of number that commands a premium multiple as a standalone.
800-volt is where the data-centre power stack is heading. As rack densities climb, operators are moving to higher-voltage DC distribution to cut losses and copper. EPC’s positioning on that transition, and its roadmap into solid-state transformers, is what justifies paying more than five times forward revenue.
The AI power-infrastructure land grab is accelerating. This deal follows nVent’s $1.75 billion purchase of Maverick Power two weeks earlier and a string of similar transactions. Companies with proven power-electronics engineering are scarce, and buyers are paying up before the assets disappear.
- Valuation on forward growth: The price assumes 40% growth and sharp margin expansion in 2027; a slowdown in AI capex would strain both.
- Spin-off timing: Executing a major integration and a public separation within a few months compounds operational risk.
- Customer concentration: Data-centre power vendors typically rely on a handful of hyperscale buyers whose plans can shift quickly.
- Technology leadership: Early positioning in 800-volt architectures gives EPC a head start on the next infrastructure cycle.
- Re-rating potential: A standalone infrastructure company with EPC's growth and margins could trade well above Flex's blended multiple.
- Manufacturing scale: Flex's global production footprint lets EPC ramp capacity faster than it could alone.
Source: Flex