We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Will Flex's Top-Line Benefit From Crown Technical Systems Buyout?
Read MoreHide Full Article
Flex Ltd. (FLEX - Free Report) has announced a definitive agreement to acquire Crown Technical Systems for $325 million in an all-cash deal. The acquisition is anticipated to be accretive within the first year following buyout completion. It is expected to be finalized by December 2024, pending standard closing conditions, including regulatory approvals.
This acquisition enhances Flex's presence in rapidly expanding and profitable markets, particularly in modular data center adoption and medium-voltage power distribution. This move broadens Flex's power portfolio into the utility power sector, capitalizing on ongoing trends in grid modernization and increased energy generation. Furthermore, it bolsters Flex's critical power offerings and accelerates U.S. data center market growth.
Based in California’s Inland Empire region, Crown Technical Systems has nearly 30 years of expertise in tackling critical power distribution and control challenges. The company offers extensive modular solutions, medium voltage switchgear and control and relay products. It serves diverse long-standing customers, including utilities, data centers and power generation. It has facilities in California, Texas and Canada. For fiscal 2025, which concludes on March 31, 2025, Crown Technical Systems is projected to generate around $120 million in revenues, along with a high-teens earnings before interest, taxes, depreciation and amortization (EBITDA) margin.
Flex highlighted that acquiring Crown Technical Systems enhances its ability to support customers facing power, heat and scalability challenges in the data center industry, in line with its long-term growth objectives.
FLEX Focused on Bolstering its Data Center Power Portfolio
Flex is working on bolstering its data center power portfolio to expand its footprint in the lucrative data center power market.
On Aug. 22, 2024, Flex’s subsidiary, Anord Mardix, known for its expertise in critical power distribution and protection, opened a new state-of-the-art facility in Dundalk, Ireland. This facility will serve as an assembly hub for switchgear and modular power systems, meeting the increasing global demand for safe and reliable data center power solutions, particularly as artificial intelligence (AI) technology advances.
In May 2024, the company bolstered its offerings by acquiring FreeFlow, a leading provider in global secondary markets focused on asset disposition and digital circular economy tracking. This acquisition aims to expand Flex's service reach in emerging markets like data centers, enterprises and lifestyle sectors, unlocking new revenue streams while promoting sustainability through second-life products.
With these initiatives, Flex is poised to significantly enhance its revenue growth in the evolving data center landscape and improve financial performance in the long term.
Flex offers advanced manufacturing solutions and additional value to customers through a wide array of services, including design and engineering, component services, rapid prototyping, fulfillment and circular economy solutions. Flex is well poised to gain from robust momentum in automotive, cloud and data center power.
However, due to weak macro trends in core industrial, revenues in Reliability Solutions are likely to be down in the high single-digit to mid-teens in the fiscal second quarter. Sluggishness in enterprise IT will keep Agility Solutions revenues flat to slightly down in the fiscal second quarter.
FLEX’s Zacks Rank & Stock Price Performance
FLEX currently carries a Zacks Rank #4 (Sell). Shares of the company have gained 89.5% in the past year compared with the sub-industry's growth of 5.8%.
Itron is a technology and services company and one of the leading global suppliers of a wide range of standard, advanced, and smart meters and meter communication systems. It delivered an earnings surprise of 57%, on average, in the trailing four quarters. In the last reported quarter, ITRI pulled off an earnings surprise of 26%.
Cirrus Logic’s performance is driven by increasing shipments in the smartphone market. Steady momentum in the laptop market and standout next-generation flagship smartphone design cushion the top line. CRUS delivered an earnings surprise of 56.6%, on average, in the trailing four quarters.
SS&C Technologies Holdings delivers investment and financial management software and related services focused exclusively on the financial services industry. It delivered an earnings surprise of 3.1%, on average, in the trailing four quarters. In the last reported quarter, SSNC pulled off an earnings surprise of 4.9%.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Shutterstock
Will Flex's Top-Line Benefit From Crown Technical Systems Buyout?
Flex Ltd. (FLEX - Free Report) has announced a definitive agreement to acquire Crown Technical Systems for $325 million in an all-cash deal. The acquisition is anticipated to be accretive within the first year following buyout completion. It is expected to be finalized by December 2024, pending standard closing conditions, including regulatory approvals.
This acquisition enhances Flex's presence in rapidly expanding and profitable markets, particularly in modular data center adoption and medium-voltage power distribution. This move broadens Flex's power portfolio into the utility power sector, capitalizing on ongoing trends in grid modernization and increased energy generation. Furthermore, it bolsters Flex's critical power offerings and accelerates U.S. data center market growth.
Based in California’s Inland Empire region, Crown Technical Systems has nearly 30 years of expertise in tackling critical power distribution and control challenges. The company offers extensive modular solutions, medium voltage switchgear and control and relay products. It serves diverse long-standing customers, including utilities, data centers and power generation. It has facilities in California, Texas and Canada. For fiscal 2025, which concludes on March 31, 2025, Crown Technical Systems is projected to generate around $120 million in revenues, along with a high-teens earnings before interest, taxes, depreciation and amortization (EBITDA) margin.
Flex highlighted that acquiring Crown Technical Systems enhances its ability to support customers facing power, heat and scalability challenges in the data center industry, in line with its long-term growth objectives.
FLEX Focused on Bolstering its Data Center Power Portfolio
Flex is working on bolstering its data center power portfolio to expand its footprint in the lucrative data center power market.
On Aug. 22, 2024, Flex’s subsidiary, Anord Mardix, known for its expertise in critical power distribution and protection, opened a new state-of-the-art facility in Dundalk, Ireland. This facility will serve as an assembly hub for switchgear and modular power systems, meeting the increasing global demand for safe and reliable data center power solutions, particularly as artificial intelligence (AI) technology advances.
In May 2024, the company bolstered its offerings by acquiring FreeFlow, a leading provider in global secondary markets focused on asset disposition and digital circular economy tracking. This acquisition aims to expand Flex's service reach in emerging markets like data centers, enterprises and lifestyle sectors, unlocking new revenue streams while promoting sustainability through second-life products.
With these initiatives, Flex is poised to significantly enhance its revenue growth in the evolving data center landscape and improve financial performance in the long term.
Flex Ltd. Price and Consensus
Flex Ltd. price-consensus-chart | Flex Ltd. Quote
Flex offers advanced manufacturing solutions and additional value to customers through a wide array of services, including design and engineering, component services, rapid prototyping, fulfillment and circular economy solutions. Flex is well poised to gain from robust momentum in automotive, cloud and data center power.
However, due to weak macro trends in core industrial, revenues in Reliability Solutions are likely to be down in the high single-digit to mid-teens in the fiscal second quarter. Sluggishness in enterprise IT will keep Agility Solutions revenues flat to slightly down in the fiscal second quarter.
FLEX’s Zacks Rank & Stock Price Performance
FLEX currently carries a Zacks Rank #4 (Sell). Shares of the company have gained 89.5% in the past year compared with the sub-industry's growth of 5.8%.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks from the broader technology space are Itron, Inc. (ITRI - Free Report) , Cirrus Logic, Inc. (CRUS - Free Report) and SS&C Technologies Holdings, Inc. (SSNC - Free Report) . ITRI & CRUS presently sports a Zacks Rank #1 (Strong Buy), whereas SSNC carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Itron is a technology and services company and one of the leading global suppliers of a wide range of standard, advanced, and smart meters and meter communication systems. It delivered an earnings surprise of 57%, on average, in the trailing four quarters. In the last reported quarter, ITRI pulled off an earnings surprise of 26%.
Cirrus Logic’s performance is driven by increasing shipments in the smartphone market. Steady momentum in the laptop market and standout next-generation flagship smartphone design cushion the top line. CRUS delivered an earnings surprise of 56.6%, on average, in the trailing four quarters.
SS&C Technologies Holdings delivers investment and financial management software and related services focused exclusively on the financial services industry. It delivered an earnings surprise of 3.1%, on average, in the trailing four quarters. In the last reported quarter, SSNC pulled off an earnings surprise of 4.9%.