Flex to Acquire EPC Power for $4.4 Billion to Expand AI Data Center Infrastructure

The bottleneck in artificial intelligence infrastructure is no longer just the silicon processor, but the physical delivery of electricity to the server rack. As power density rises to support modern workloads, traditional 415-volt and 480-volt distribution forces data centers to use thick copper cables that suffer from high resistive losses. The emerging standard is an 800-volt direct-current architecture, which carries the same power at a lower current, cutting conductor mass and improving overall facility efficiency. This transition requires entirely new classes of digital rectifiers and solid-state transformers to manage the load, shifting the industry's focus toward advanced power conversion.[3][5]

That generational shift in power architecture is the catalyst behind Flex's definitive agreement to acquire EPC Power Corp. for $4.4 billion in cash. The transaction, announced on September 3, 2026, brings the California-based inverter and power conversion manufacturer into Flex's Cloud and Power Infrastructure segment. The move represents a major consolidation in the supply chain for mission-critical electrical equipment, positioning Flex to capture a larger share of the capital expenditure currently flooding into the artificial intelligence sector as developers race to secure reliable power hardware.[1][2]

EPC Power, founded in 2010, specializes in utility-scale inverters and digital rectifiers designed specifically for these high-density environments. The company expects to generate approximately $800 million in revenue in calendar 2026, meaning Flex is paying roughly 5.5 times this year's sales to secure the technology. The premium valuation reflects the scarcity of proven, at-scale manufacturers capable of delivering the specific grid-forming controls and power conversion hardware that hyperscale data center operators now require to keep their facilities online.[1][5]

"A generational shift in power architecture is underway, driven by rising power density and the changing demands of digital infrastructure," said Flex CEO Revathi Advaithi. She noted that EPC's grid-forming technology allows Flex to deliver 800-volt power conversion today while progressing toward solid-state transformers. The integration of these systems is designed to create a seamless grid-to-chip offering, ensuring that power reaches the processors with maximum resilience and minimal loss, a critical requirement for continuous AI training runs.[1][6]

The acquisition is funded through a mix of debt and equity, supported by a $4.4 billion bridge financing commitment from Citigroup, Bank of America, and BofA Securities. The transaction utilizes a locked-box mechanism valuing EPC Power as of June 30, 2026, and is expected to close in the fourth quarter of 2026. The deal remains subject to customary regulatory approvals, including clearance under the Hart-Scott-Rodino Antitrust Improvements Act, but no significant hurdles have been flagged by the involved parties as they prepare for the integration.[2][5]

Beyond data centers, the deal secures significant manufacturing capacity for grid-scale energy storage. EPC Power currently has more than 15 gigawatts of equipment deployed across 62 countries, supported by its former controlling shareholders, Goldman Sachs Alternatives and Cleanhill Partners. Cleanhill originally invested in the company in 2021, betting that power conversion would become a critical enabling technology as renewable generation, grid modernization, and digital infrastructure began to converge into a single, highly interdependent market.[1][4]

In July 2026, EPC Power opened a 167,000-square-foot manufacturing plant in Fountain Inn, South Carolina, which nearly tripled its production capacity. The facility starts at 27 gigawatts of annual capacity and can scale to 40 gigawatts, employing approximately 275 workers. This expansion was driven by the rapid convergence of grid resilience and data center power demand, which has forced hardware suppliers to scale their operations at an unprecedented pace to meet customer timelines and avoid costly project delays.[5]

Flex projects that EPC Power's annual U.S. manufacturing capacity will surpass 30 gigawatts by 2027. This domestic footprint is critical, as lead times on medium-voltage conversion gear have become a primary constraint on large-load projects and grid modernization efforts. By bringing this manufacturing capacity in-house, Flex can offer data center developers a more reliable procurement schedule, bypassing the supply chain bottlenecks that have delayed competing infrastructure projects over the past two years and providing a distinct competitive advantage.[1][5]

The integration of EPC Power sets the stage for a broader corporate restructuring at Flex. Upon closing, the acquired business will join the Cloud and Power Infrastructure division, which Flex plans to spin off into an independent, publicly traded company in the first quarter of 2027. The addition of EPC's high-margin hardware is expected to enhance the growth and EBITDA margin profile of the new SpinCo, making it a more attractive pure-play investment in the infrastructure sector for institutional backers.[1][3]

The $4.4 billion transaction signals that the infrastructure required to support artificial intelligence is moving beyond the compute layer. The ability to manage rapid swings in electricity demand and improve speed-to-power is now as valuable as the processors themselves. By securing the hardware that physically bridges the gap between the utility grid and the server rack, Flex is positioning its future spin-off to capitalize on the defining engineering challenge of the next decade, ensuring that the physical grid can support the digital future.[3][6]