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Flex to Acquire Electrical Power Products to Boost Power Capabilities
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Key Takeaways
Flex will acquire EP2 in an all-cash $1.1B deal, expected to be EPS accretive in year one post-close.
EP2 brings 35 years of expertise and projects $323M in FY26 revenues with double-digit growth outlook.
The deal expands Flex's reach in grid modernization, electrification and engineered power solutions.
Flex Ltd. (FLEX - Free Report) has entered into a definitive agreement to acquire Electrical Power Products, Inc. (“EP2”), a leading provider of engineered-to-order electrical power control and protection systems, in an all-cash transaction valued at approximately $1.1 billion. The deal also includes anticipated tax benefits of around $0.1 billion, bringing the net value to roughly $1.0 billion. The acquisition is expected to be accretive to adjusted earnings per share in the first full fiscal year after closing.
EP2 brings more than 35 years of expertise in designing, integrating and manufacturing highly engineered control and relay panels, along with modular, integrated control buildings. These solutions are widely used by utilities, power generation companies and industrial customers. EP2 is expected to generate approximately $323 million in revenues for the fiscal year ending March 31, 2026, supported by anticipated double-digit organic growth and a mid- to high-teens adjusted EBITDA margin profile. The transaction is expected to close in the first quarter of Flex’s fiscal 2027, subject to customary closing conditions.
The acquisition enhances Flex’s exposure to high-growth, margin-accretive markets driven by long-term trends such as grid modernization, electrification, data center expansion and U.S. reshoring. It strengthens the company’s Critical Power portfolio, deepens its presence in the utilities sector and expands its engineered-to-order power distribution and control capabilities.
Citi is serving as the exclusive financial advisor to Flex, while RA Capital Associates LLC is acting as the exclusive financial advisor to EP2. Flex management is expected to provide additional details on the acquisition during its upcoming earnings call.
Management highlighted that the addition of EP2 will expand the company’s capabilities in supporting the modernization of the U.S. electrical infrastructure. As demand and system complexity continue to rise, EP2’s engineered-to-order expertise and customer-centric approach are expected to strengthen Flex’s ability to deliver reliable, scalable and innovative power solutions.
Flex is gaining from a robust acquisition strategy that continues to expand its manufacturing footprint and strengthen its presence in high-growth markets. Recent deals, including JetCool Technologies and Crown Technical Systems, have enhanced its capabilities in data center cooling and critical power solutions, supporting AI-driven infrastructure demand. The company is also scaling its global capacity, with new assets in Poland boosting compute and cooling capabilities across EMEA. Over time, acquisitions such as Bose assets, Mirror Controls International and Alcatel-Lucent facilities have further diversified Flex’s exposure across audio, automotive and telecom markets.
For the fourth quarter of fiscal 2026, Flex expects revenues to be between $6.75 billion and $7.05 billion. The company expects Reliability Solutions revenues to increase in the low double-digit to mid-teens range. Agility Solutions’ revenues are expected to rise in the low to mid-single-digit range.
FLEX’s Zacks Rank & Stock Price Performance
FLEX currently carries a Zacks Rank #2 (Buy). Shares of the company have surged 83.1% in the past year compared with the Zacks Electronics - Miscellaneous Products industry's growth of 52.3%.
Garmin’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters while missing in one, with the average surprise being 6.39%. In the last reported quarter, GRMN delivered an earnings surprise of 16.74%. Its shares have gained 5.6% in the past six months.
Hayward’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 10.11%. In the last reported quarter, HAYW delivered an earnings surprise of 3.57%. Its shares have dropped 4% in the past year.
Teradyne’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 17.46%. In the last reported quarter, TER delivered an earnings surprise of 32.35%. Its shares have soared 235.8% in the past year.
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Flex to Acquire Electrical Power Products to Boost Power Capabilities
Key Takeaways
Flex Ltd. (FLEX - Free Report) has entered into a definitive agreement to acquire Electrical Power Products, Inc. (“EP2”), a leading provider of engineered-to-order electrical power control and protection systems, in an all-cash transaction valued at approximately $1.1 billion. The deal also includes anticipated tax benefits of around $0.1 billion, bringing the net value to roughly $1.0 billion. The acquisition is expected to be accretive to adjusted earnings per share in the first full fiscal year after closing.
EP2 brings more than 35 years of expertise in designing, integrating and manufacturing highly engineered control and relay panels, along with modular, integrated control buildings. These solutions are widely used by utilities, power generation companies and industrial customers. EP2 is expected to generate approximately $323 million in revenues for the fiscal year ending March 31, 2026, supported by anticipated double-digit organic growth and a mid- to high-teens adjusted EBITDA margin profile. The transaction is expected to close in the first quarter of Flex’s fiscal 2027, subject to customary closing conditions.
The acquisition enhances Flex’s exposure to high-growth, margin-accretive markets driven by long-term trends such as grid modernization, electrification, data center expansion and U.S. reshoring. It strengthens the company’s Critical Power portfolio, deepens its presence in the utilities sector and expands its engineered-to-order power distribution and control capabilities.
Citi is serving as the exclusive financial advisor to Flex, while RA Capital Associates LLC is acting as the exclusive financial advisor to EP2. Flex management is expected to provide additional details on the acquisition during its upcoming earnings call.
Management highlighted that the addition of EP2 will expand the company’s capabilities in supporting the modernization of the U.S. electrical infrastructure. As demand and system complexity continue to rise, EP2’s engineered-to-order expertise and customer-centric approach are expected to strengthen Flex’s ability to deliver reliable, scalable and innovative power solutions.
Flex Ltd. Price and Consensus
Flex Ltd. price-consensus-chart | Flex Ltd. Quote
Flex is gaining from a robust acquisition strategy that continues to expand its manufacturing footprint and strengthen its presence in high-growth markets. Recent deals, including JetCool Technologies and Crown Technical Systems, have enhanced its capabilities in data center cooling and critical power solutions, supporting AI-driven infrastructure demand. The company is also scaling its global capacity, with new assets in Poland boosting compute and cooling capabilities across EMEA. Over time, acquisitions such as Bose assets, Mirror Controls International and Alcatel-Lucent facilities have further diversified Flex’s exposure across audio, automotive and telecom markets.
For the fourth quarter of fiscal 2026, Flex expects revenues to be between $6.75 billion and $7.05 billion. The company expects Reliability Solutions revenues to increase in the low double-digit to mid-teens range. Agility Solutions’ revenues are expected to rise in the low to mid-single-digit range.
FLEX’s Zacks Rank & Stock Price Performance
FLEX currently carries a Zacks Rank #2 (Buy). Shares of the company have surged 83.1% in the past year compared with the Zacks Electronics - Miscellaneous Products industry's growth of 52.3%.
Image Source: Zacks Investment Research
Other Stocks to Consider
Some other top-ranked stocks from the broader technology space are Garmin Ltd. (GRMN - Free Report) , Hayward Holdings, Inc. (HAYW - Free Report) and Teradyne, Inc. (TER - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Garmin’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters while missing in one, with the average surprise being 6.39%. In the last reported quarter, GRMN delivered an earnings surprise of 16.74%. Its shares have gained 5.6% in the past six months.
Hayward’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 10.11%. In the last reported quarter, HAYW delivered an earnings surprise of 3.57%. Its shares have dropped 4% in the past year.
Teradyne’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 17.46%. In the last reported quarter, TER delivered an earnings surprise of 32.35%. Its shares have soared 235.8% in the past year.