Flex to acquire Electrical Power Products for $1.1 billion

AUSTIN, Texas - Flex (NASDAQ:FLEX) announced today it has entered into a definitive agreement to acquire Electrical Power Products, Inc., a provider of engineered-to-order electrical power control and protection systems, for approximately $1.1 billion in cash. The deal represents roughly 4.6% of Flex’s $23.83 billion market capitalization and comes as the company trades near its 52-week high of $72.22, following a remarkable 95% surge over the past year.

The transaction reflects anticipated tax benefits valued at approximately $0.1 billion, bringing the net cost to about $1.0 billion after tax benefits, according to a press release statement. Flex expects the deal to be accretive to adjusted earnings per share in the first full fiscal year after closing.

EP2 designs, integrates, and manufactures control and relay panels and modular control buildings for utility, power generation, and industrial customers. The company operates a manufacturing campus in Des Moines, Iowa, and has more than 35 years of experience in the sector.

EP2 is expected to generate revenue of approximately $323 million in the fiscal year ending March 31, 2026, with anticipated double-digit organic growth and a mid to high-teens adjusted EBITDA margin profile. The acquisition would add roughly 1.2% to Flex’s existing revenue base of $26.84 billion in the last twelve months.

"The addition of EP2 expands our capabilities to play a larger role in modernizing the electrical backbone of the U.S., while broadening the portfolio of critical power technologies we can offer our customers," said Revathi Advaithi, Chief Executive Officer of Flex.

The acquisition adds engineering talent and expands Flex’s manufacturing footprint in the Midwest. The deal broadens Flex’s Critical Power portfolio and deepens its presence in the utility sector.

The transaction is expected to close in the first quarter of Flex’s fiscal year 2027, subject to customary closing conditions, including clearance under the Hart-Scott-Rodino Act.

Citi is serving as exclusive financial advisor to Flex. RA Capital Associates LLC is serving as exclusive financial advisor to Electrical Power Products, Inc.

In other recent news, FLEX Ltd reported strong fiscal third-quarter 2026 results, surpassing expectations with revenue of $7.058 billion, an adjusted operating margin of 6.5%, and adjusted earnings per share of $0.87. These figures exceeded the company’s guidance midpoints of $6.8 billion, 6.2%, and $0.77, respectively, leading Stifel to reiterate a Buy rating and maintain a price target of $75.00. Meanwhile, Flex has started manufacturing AMD Instinct MI355X GPU platforms at its Austin, Texas facility, with volume production anticipated to increase in the next quarter. The platforms, which include eight AMD Instinct GPUs, undergo factory testing and validation using JetCool’s liquid-cooling hardware.

Additionally, Flex announced reference designs for NVIDIA Omniverse DSX Blueprint to accelerate AI data center deployment, claiming a reduction in deployment timelines by up to 30%. JetCool, a Flex company, partnered with Broadcom to develop liquid cooling solutions for next-generation AI processors, addressing thermal challenges as AI chip power densities increase. In related news, Baird initiated coverage on Jabil Inc. with an outperform rating, citing the company’s role as a key enabler in the AI sector and its growth opportunities. These developments highlight the ongoing advancements and collaborations in the AI and technology sectors.

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