Blackstone Acquires Flow Control Holdings to Secure AI Data Center Liquid Cooling Supply

Blackstone has entered a definitive agreement to acquire Flow Control Holdings from Audax Private Equity, taking control of a critical supplier in the data center supply chain. The $1.3 trillion alternative asset manager will execute the buyout through its Capital Partners and Energy Transition Partners funds, with the transaction scheduled to close in the fourth quarter of 2026. Audax will retain a minority equity stake in the Cincinnati-based manufacturer.[1][2][5]

The acquisition targets the physical bottleneck of artificial intelligence: thermal management. Flow Control Holdings manufactures the highly engineered components—specifically coolant distribution units, in-row manifolds, and secondary fluid networks—that hyperscalers and original equipment manufacturers require to keep dense server racks operational. Liquid cooling operates with significantly higher energy efficiency than traditional air systems, reducing carbon dioxide emissions and lowering the power usage effectiveness ratio of modern compute facilities.[1][5]

"We believe that FCH has enormous tailwinds for continued growth as the latest generations of high-performance AI infrastructure increasingly rely on liquid cooling technology for significantly improved energy and chip efficiency," stated Bilal Khan and Mark Zhu, managing directors at Blackstone. The firm intends to fund a capacity expansion plan to meet the unprecedented demand generated by the global buildout of AI infrastructure.[1][5]

Audax Private Equity, which managed approximately $20 billion in assets as of July 2026, originally acquired Flow Control Holdings in March 2022. Under Audax's ownership, the manufacturer executed 10 separate acquisitions over four years, expanding its production and distribution footprint across the data center, food, beverage, and pharmaceutical markets.[1][4][5]

Flow Control Holdings Chief Executive Officer Scott Kerns noted that the company utilized that capital to secure its current market position. "Over the past four years, we've invested significantly to develop a leading position in the data center cooling market supporting our OEM customers and hyperscalers," Kerns said, adding that the Blackstone partnership marks the next phase of the company's growth.[1][5]

The inclusion of Blackstone Energy Transition Partners, a strategy that has committed roughly $30 billion in equity globally, underscores how data center logistics have merged with energy infrastructure. As power grids strain under the load of new AI facilities, institutional investors are pricing thermal efficiency as a core utility rather than a peripheral hardware feature.[1][5]

Audax partner Don Bramley characterized the exit as a "text-book example" of the firm's buy-and-build strategy, validating the middle-market consolidation model before passing the asset to a larger institutional sponsor. Houlihan Lokey and Jefferies advised Flow Control Holdings financially, with Ropes & Gray serving as legal counsel. Blackstone retained William Blair, UBS, and Goldman Sachs, alongside Kirkland & Ellis.[1][3][4][5]

The transaction shifts Flow Control Holdings from a regional roll-up into a primary infrastructure asset. When the deal finalizes in the fourth quarter of 2026, Blackstone will dictate the expansion pace of a supply chain that determines how quickly the technology sector can deploy its next generation of processors.[1][2][5]