Blackstone Buys Data Center Cooling Supplier Flow Control Holdings, Taps UBS for Financing

Blackstone agreed on Sept. 10 to acquire Flow Control Holdings from Audax Private Equity, adding a Cincinnati-based manufacturer of liquid cooling components to its portfolio as hyperscalers and AI hardware makers drive demand for more capable thermal management in data centers. UBS was brought in to finance the deal: according to a person familiar with the matter cited by Bloomberg, the bank has been mandated to provide a first-lien term loan, though the size and terms weren't disclosed. The purchase price wasn't released either.

The structure of the deal crosses two Blackstone strategies. Funds from both Blackstone Capital Partners and Blackstone Energy Transition Partners are participating, per the announcement reviewed by Business Wire. Audax will keep a minority equity stake and continue working with Blackstone and FCH management post-close, which is expected in the fourth quarter.

FCH's product line sits at the infrastructure layer most exposed to AI compute growth. The company's components, coolant distribution units, in-row manifolds, and secondary fluid networks, go directly into the racks that OEMs and hyperscalers are deploying at scale. The business also serves food, beverage, and pharmaceutical customers, which offers some revenue diversification, but the pitch to Blackstone is clearly the data center angle.

The thermal management logic is straightforward. As the latest generations of AI chips run hotter, liquid cooling handles heat generated by advanced computing systems more efficiently than conventional air cooling, and can improve power usage effectiveness in the process. That math is not lost on buyers paying for the supply chain that makes liquid cooling possible.

Audax built FCH through acquisitions. During its ownership, the company completed 10 bolt-on deals to expand its capabilities across data center cooling and its adjacent markets, according to FCH CEO Scott Kerns in a statement released with the announcement. Audax had roughly $20 billion in assets under management as of July 2026 and has backed more than 180 platform companies since 1999.

Blackstone's senior managing director Bilal Khan and managing director Mark Zhu, in a statement, tied the investment directly to AI infrastructure, arguing that the latest generations of high-performance AI hardware increasingly depend on liquid cooling. That's a projection, not a booked order book, and Blackstone's forward guidance on infrastructure themes has a habit of outrunning near-term revenue realities. FCH's actual revenue wasn't part of any public disclosure.

The broader market context adds some weight to the thesis. The global data center cooling market, per Fortune Business Insights, is projected to grow from $21.0 billion in 2026 to $54.4 billion by 2034, a 12.6% compound annual growth rate. Hyperscale data centers are the fastest-growing segment by type. Those figures come from a commercial market research report, not from FCH's own financials, so treat them as directional.

With megadeals now on track to account for a 40% increase in aggregate deal value in 2026 year-on-year according to PwC's mid-year outlook, Blackstone is hunting in a crowded field. The FCH transaction is a middle-market buy, not a megadeal, but it fits a pattern the firm has executed elsewhere: take a component supplier embedded in an infrastructure theme, consolidate it, and grow revenue on the back of a capital spending wave it doesn't control. Whether that wave holds depends entirely on what hyperscalers actually build.

Sources cited:
- Blackstone press release via Business Wire / Yahoo Finance (https://ca.finance.yahoo.com/news/blackstone-acquire-flow-control-holdings-140000167.html)
- Bloomberg (https://www.bloomberg.com/news/articles/2026-09-18/blackstone-lands-loan-for-data-center-cooling-firm-acquisition)
- Investing.com (https://www.investing.com/news/company-news/blackstone-to-acquire-data-center-cooling-firm-flow-control-93CH-4896233)
- PE Insights / Substack (https://peinsights.substack.com/p/blackstone-buys-data-centre-cooling)
- Fortune Business Insights (https://www.fortunebusinessinsights.com/industry-reports/data-center-cooling-market-101959)
- PwC Global M&A Industry Trends: 2026 Mid-Year Outlook (https://www.pwc.com/gx/en/services/deals/trends.html)