Flex's Acquisition of EPC Power: A Major Move for AI Data Centers and Smart Grid Solutions

Flex to Acquire EPC Power: A Major Move for AI Data Centers and Smart Grid Solutions

On September 3, 2026, Flex Ltd. (NASDAQ: FLEX) revealed its plans to acquire EPC Power, a leading provider of power conversion solutions, for a significant sum of $4.4 billion. This acquisition is set to enhance Flex's operations in the cutting-edge field of AI data centers and smart grid solutions.

Transaction Details and Significance

The acquisition is anticipated to finalize in the fourth quarter of 2026, leading to EPC Power becoming part of Flex's Cloud and Power Infrastructure (CPI) segment. Notably, Flex intends to spin off this CPI segment into a publicly traded company in the first quarter of 2027.

EPC Power, established in 2010 and located in California, specializes in intelligent power conversion technologies integral to data center and grid applications. Their solutions, which include advanced hardware, software, and controls developed in the U.S., address the increasing demands for higher-density AI infrastructure by focusing on next-generation 800V data center power architectures. This technology plays a vital role in facilitating more efficient power delivery.

EPC Power boasts over 15 gigawatts (GW) deployed across 62 countries and is projected to exceed 30 GW in U.S. manufacturing capacity by 2027. This efficiency in power management aims to ensure that modern AI workloads can operate securely and reliably.

Growth Prospects

Flex's move to acquire EPC Power aligns perfectly with its strategy to bolster its Cloud and Power Infrastructure business to meet the burgeoning demand for AI data solutions. By integrating EPC's advanced power conversion capabilities into its existing infrastructure, Flex aims to position itself at the forefront of the transition towards more sophisticated power architectures. CEO Revathi Advaithi explained, "EPC Power brings leading power conversion and grid-forming technology that positions us to capitalize on this shift. Together with our existing technology, we can better deliver integrated digital infrastructure systems."

The revenue projections for EPC Power are also promising. The company is expected to generate approximately $800 million in revenue for calendar 2026, with organic growth predicted to be around 40% in the following year. Additionally, analysts forecast an increase in EBITDA margin to nearly 30% in 2027.

Strategic Implications

The importance of this acquisition extends beyond mere numbers. It signifies a larger trend in the energy sector, where the demand for intelligent, resilient, and efficient power systems is growing rapidly due to the acceleration of AI-driven applications. Jim Fusaro, EPC Power's CEO, stated that customers are now looking for power systems that can meet these demanding requirements at scale.

This deal places Flex in a competitive position as it expands its offerings across electric infrastructure while enhancing its existing portfolio, including power, cooling, and computing services. The combination is expected to facilitate grid stabilization and provide backup power capabilities essential for modern applications, particularly those utilizing advanced graphics processing units (GPUs) critical for AI operations.

Future Financing Strategy

Flex is currently examining various financing options to support this acquisition, relying on a mix of debt and equity. The company has engaged multiple financial advisors, including Goldman Sachs & Co. and J.P. Morgan Securities, to ensure a smooth transaction process.

Conclusion

As Flex prepares to finalize this acquisition, the implications for both companies and the broader industry are significant. The integration of EPC Power's advanced technologies into Flex's already robust infrastructure capabilities sets the stage for enhanced performance in AI applications and contributes to the ongoing evolution of energy systems in a digital-first world. By embracing these advancements, Flex strengthens its position as a leader in the energy transformation, ready to tackle the immense challenges and opportunities of the AI era.