Flex Buys EPC Power for $4.4B to Load Up on AI Data Center Infrastructure

Flex (NASDAQ: FLEX) agreed on September 3 to acquire EPC Power Corp. for $4.4 billion in cash, a bet that demand for high-density AI computing infrastructure will keep pressure on the power-conversion market long enough to justify one of the largest deals in the company's recent history.

According to a press release reviewed by PRNewswire, the transaction is an all-cash deal with committed debt financing from Bank of America and Citi. Evercore advised Flex; Goldman Sachs and J.P. Morgan advised EPC Power and its controlling shareholders, Goldman Sachs Alternatives and Cleanhill Partners. The deal is expected to close in the fourth quarter of calendar 2026, subject to customary regulatory approvals.

EPC Power, founded in 2010 and headquartered in Poway, California, designs and manufactures power-conversion systems for data centers, utility-scale energy storage, and microgrids. The key asset is its 800-volt power architecture, including digital rectifiers and solid-state transformers, which Flex says is essential for next-generation AI compute workloads. As reported in Flex's investor relations statement, the acquisition also adds what the company calls grid-forming technology, systems that can stabilize power delivery at the grid edge, not just inside a data center.

The strategic logic is two-part. First, Flex wants EPC Power's technology to sit inside its Cloud and Power Infrastructure segment. Second, and more consequentially for investors, Flex plans to spin that segment off as an independent publicly traded company in the first calendar quarter of 2027. In other words, Flex is paying $4.4 billion for an asset it expects to hand to a new set of shareholders within roughly six months of closing. That structure turns the acquisition into a pre-IPO asset-building exercise, not a hold.

The numbers Flex is projecting for EPC Power are aggressive. According to Yahoo Finance's reporting on the deal, EPC Power is on track for roughly $800 million in revenue in calendar 2026. Flex is guiding for approximately 40 percent organic revenue growth in 2027, with EBITDA margins expanding toward 30 percent. Those are sell-side-style projections attached to a company that hasn't traded publicly, so take them with the skepticism the market will. FLEX stock has gained 71 percent year-to-date, which gives management some room to buy at a premium without immediately spooking holders, but the dilution from the equity component of the financing will still show up.

The deal fits a pattern visible across the industrial and infrastructure landscape in 2026. As PwC noted in its mid-year M&A outlook, deal values from megadeals are on track to increase year-on-year by 40 percent if the current pace continues, with well-capitalized buyers chasing assets that enable the AI economy, compute capacity, energy supply, and the infrastructure between them. Flex is buying directly into that corridor.

What's less clear is what the regulatory path looks like. The deal involves a California-headquartered manufacturer with U.S.-based engineering and production, and the buyer is technically a Singapore-incorporated company with global operations in 30 countries, which could invite scrutiny from CFIUS depending on how the government classifies 800-volt power conversion technology for critical infrastructure. Flex and EPC Power have not publicly addressed that question. The company said only that the deal is subject to 'customary regulatory approvals.'

If the spin-off timeline holds, a new publicly traded power-infrastructure company would hit the market in the spring of 2027 carrying both EPC Power's technology and Flex's existing Critical Power and Embedded Power businesses. Whether the market values that combination at a premium to what Flex paid is a question the EBITDA projections are designed to answer optimistically.

Sources cited:
- Flex Investor Relations / PRNewswire (https://investors.flex.com/news/news-details/2026/Flex-to-Acquire-EPC-Power-Adding-Leading-Power-Conversion-Capabilities-for-AI-Data-Centers-and-Grid-Applications/default.aspx)
- Yahoo Finance (https://finance.yahoo.com/technology/ai/articles/flex-powers-ai-ambitions-4-230544978.html)
- EPC Power official announcement (https://www.epcpower.com/news/epc-power-announces-sale-to-flex-for-4-4b)
- SEC Form DEFA14A (Flex Ltd.) (https://www.sec.gov/Archives/edgar/data/0000866374/000119312526382496/d108491ddefa14a.htm)
- PwC Global M&A Industry Trends: 2026 Mid-Year Outlook (https://www.pwc.com/gx/en/services/deals/trends.html)