Flex Ltd. Secures $2 Billion Preferred Investment for Axiom Subsidiary Spin-Off

Key numbers

Deal value	$2.0B
Share of market cap	4.6%

Key highlights

• Capital raise involves 200,000 shares of Series A Convertible Preferred Stock at $10,000 per share
• Proceeds will fund the acquisition of EPC Power Corp and bolster Axiom's balance sheet
• Flex is providing a guarantee including a mandatory redemption obligation if the spin-off is delayed
• Axiom initial enterprise value set at $37.5 billion in the transaction agreement
• Spin-off of Axiom into an independent public company is scheduled for the first quarter of 2027

Capital Raise Details

The $2.0 billion private placement consists of Series A Convertible Preferred Stock issued by Axiom Solutions International, the Cloud and Power Infrastructure segment of Flex Ltd. Led by General Catalyst and Koch Equity Development, the investment carries a dividend rate of 10.0% per annum in cash prior to the planned corporate separation. Following the spin-off, the dividend steps down to 6.0% in cash or 7.0% if paid in kind. Flex acts as a guarantor for the transaction, agreeing to redeem the preferred shares at 115% of the purchase price in cash or 125% in Flex ordinary shares if the spin-off is not finalized by December 31, 2027.

Down 4.9% since our story on 5 Oct: $116.61 when we broke it → $110.88 at the close on 13 Oct. Daily closing prices. Source: Yahoo Finance.

Show the prices

14 Sep	$108.32
15 Sep	$108.00
16 Sep	$107.90
17 Sep	$109.02
18 Sep	$108.51
21 Sep	$111.61
22 Sep	$114.45
23 Sep	$112.30
24 Sep	$112.40
25 Sep	$114.68
28 Sep	$113.04
29 Sep	$113.83
30 Sep	$109.99
1 Oct	$112.78
2 Oct	$116.61
5 Oct	$116.76
6 Oct	$121.38
7 Oct	$119.34
8 Oct	$114.74
9 Oct	$119.83
12 Oct	$117.24
13 Oct	$110.88

Use of Proceeds

• Fund the acquisition of EPC Power Corp to expand power conversion capabilities
• Repay equity bridge financing and intermediate debt related to the EPC Power transaction
• Maintain a robust balance sheet for Axiom as it prepares for independent public listing
• Service cash dividend payments required under the Series A preferred stock agreement
• Support general corporate purposes and infrastructure capacity expansion for AI demand

Strategic Rationale

This capital raise serves as a critical milestone in Flex's strategy to unlock value from its high-growth infrastructure assets. By securing a $37.5 billion valuation for Axiom, the company establishes a market benchmark for its power and thermal management business before the Q1 2027 spin-off. The investment provides the capital necessary to integrate EPC Power, which specializes in utility-scale power conversion systems essential for the AI era. Partnering with General Catalyst brings deep expertise in the AI infrastructure buildout, positioning Axiom to address the intensifying demand for sophisticated power solutions in modern data centers.

Business Overview

Flex Ltd. is a global manufacturing and supply chain leader operating in sectors ranging from automotive to healthcare. Its Axiom subsidiary focuses specifically on the compute and power infrastructure required for advanced data centers. With annual revenues of $27.9 billion, the parent company is pivoting toward higher-margin segments like power and thermal management to capitalize on the rapid expansion of artificial intelligence. The acquisition of EPC Power further solidifies this focus, adding specialized expertise in high-performance power conversion technology. Following the separation, Axiom will operate as an independent, publicly traded entity focused on the infrastructure requirements of the global AI expansion.

Management commentary

“This investment provides equity funding for our recently announced acquisition of EPC Power and will allow Axiom to have a strong balance sheet as we prepare to stand up as an independent, publicly traded company squarely focused on the power, thermal, and compute infrastructure the AI era demands.”

“Axiom sits at the center of the power and infrastructure buildout that AI demands, and we’ve been impressed by the team’s execution and the scale of the opportunity ahead.”

FLEX LTD. · financial snapshot

Share price	$116.61
Market cap	$43.1B
Revenue (annual)	$27.9B
P/E (TTM)	45.0×
1-month price change	+9.12%
Sector	TechnologyElectronic Components

Reference market data from a third-party provider, as of the story. Not a valuation or a recommendation.