Flex Ltd. (FLEX) is making a big move in the data center power game. On Thursday, the company agreed to acquire EPC Power for $4.4 billion, and investors are already showing their approval. Shares ticked up 1.47% to $109.48 in premarket trading on Friday.
So, what's the deal all about? EPC Power specializes in intelligent power conversion solutions, particularly grid-forming technology, which is crucial for data centers and utility applications. The acquisition is a strategic fit for Flex, which has been expanding its power, cooling, and compute portfolio to meet the surging demands of AI and cloud computing.
The Details
EPC Power isn't a small player. With more than 15 GW deployed across 62 countries, it has a global footprint. Its U.S. manufacturing capacity is expected to exceed 30 GW by 2027, which is a significant scale. The company's technology supports next-generation 800V data center architectures, including rectifiers, DC-DC conversion, and planned solid-state transformers. This complements Flex's existing offerings, making the combined entity a one-stop shop for data center infrastructure.
The deal is expected to close in the fourth quarter of 2026, subject to customary regulatory approvals and closing conditions.
Synergies and Benefits
EPC Power will join Flex's Cloud and Power Infrastructure (CPI) segment, which Flex plans to spin off into an independent publicly traded company in the first quarter of 2027. This move is part of Flex's broader strategy to unlock value and focus on high-growth areas.
Financially, EPC Power is expected to generate approximately $800 million in revenue in 2026, with organic growth of around 40% in 2027. Its EBITDA margin is projected to expand to roughly 30%. That's a solid growth profile, and Flex plans to finance the acquisition through a mix of debt and equity. As of June 26, 2026, Flex had $2.84 billion in cash and cash equivalents, giving it some financial flexibility.
What's Next for Flex Stock?
Investors are also looking ahead to Flex's next earnings report, expected on October 28, 2026. Analysts are projecting EPS of $1.04, up from 79 cents year-over-year, and revenue of $8.18 billion, up from $6.80 billion. The stock currently trades at a P/E of 41.7x, which is a premium valuation relative to peers, reflecting the market's high expectations for growth.
Wall Street remains bullish. The stock carries a Buy rating with an average price target of $124.43. Recent analyst actions include Goldman Sachs maintaining a Buy with a target lowered to $154.00 on July 30, and Barclays with an Overweight rating and a target of $144.00 on the same day. Earlier, on June 4, Barclays had raised its target to $203.00.
ETF Exposure
For those who prefer ETFs, Flex holds meaningful weight in a few mid-cap funds. The John Hancock Multifactor Mid Cap ETF (JHMM) has a 0.67% weight, the Avantis US Mid Cap Value ETF (AVMV) has 1.26%, and the Avantis US Mid Cap Equity ETF (AVMC) has 0.54%. This means that significant inflows or outflows from these ETFs could automatically trigger buying or selling of Flex shares, adding another layer of market dynamics.
In summary, Flex's acquisition of EPC Power is a strategic move to strengthen its position in the data center power market, and the market is responding positively. With the deal expected to close later this year and the CPI spin-off on the horizon, Flex is positioning itself for growth in the AI-driven infrastructure boom.
