Eaton signs agreement to acquire Fibrebond Corporation, expanding reach into multi-tenant data center market

Rhea-AI Summary

Eaton (NYSE:ETN) has announced a significant acquisition agreement to purchase Fibrebond for $1.4 billion. Fibrebond, based in Minden, Louisiana, specializes in designing and building pre-integrated modular power enclosures for data center, industrial, utility, and communications customers.

The acquisition target is expected to generate $378 million in revenues for the 12 months ending February 28, 2025, with an estimated $110 million in adjusted EBITDA for 2025. The transaction is anticipated to close in the third quarter of 2025 and is expected to be neutral to Eaton's earnings per share in 2025.

This strategic move strengthens Eaton's position in the multi-tenant data center market, with Fibrebond's engineered-to-order power enclosures offering faster deployment and cost advantages through off-site equipment installation and testing procedures.

Positive

• Strategic expansion into multi-tenant data center market
• Acquisition adds $378M in projected annual revenue
• Target company projected to generate $110M in 2025 adjusted EBITDA
• Enhanced offering with pre-integrated modular power solutions
• Improved customer service through faster deployment capabilities

Negative

• Large capital outlay of $1.4B required for acquisition
• No immediate EPS accretion expected in 2025
• Integration risks and potential closing uncertainties noted in forward-looking statements

Insights

Financial Analyst

Eaton's $1.4 billion acquisition of Fibrebond represents a strategic expansion into the high-growth data center infrastructure market. The deal values Fibrebond at approximately 12.7x its projected 2025 EBITDA of $110 million, a reasonable multiple for a specialized infrastructure manufacturer with strong positioning in the booming data center sector.

The transaction gives Eaton enhanced capabilities in pre-integrated modular power enclosures - engineered structures that house critical power equipment for data centers - which addresses a significant pain point for hyperscale and multi-tenant data center operators: deployment speed. By acquiring Fibrebond's off-site equipment installation and testing capabilities, Eaton strengthens its end-to-end power solutions portfolio while potentially accelerating customer deployment timelines.

While the deal is expected to be EPS-neutral in 2025, the strategic rationale is compelling given the ongoing AI-driven surge in data center construction. Fibrebond's $378 million in annual revenue represents only about 1.5% of Eaton's $25 billion revenue base, but provides targeted exposure to the multi-tenant data center segment where demand for rapid, flexible power infrastructure deployment is particularly acute.

The acquisition aligns perfectly with Eaton's twin strategic focus areas of electrification and digitalization, positioning the company to capture additional value from the expanding data infrastructure buildout without stretching its balance sheet.

i

Eaton's $1.4 billion acquisition of Fibrebond represents a strategic expansion into the high-growth data center infrastructure market. The deal values Fibrebond at approximately 12.7x its projected 2025 EBITDA of $110 million, a reasonable multiple for a specialized infrastructure manufacturer with strong positioning in the booming data center sector.

The transaction gives Eaton enhanced capabilities in pre-integrated modular power enclosures - engineered structures that house critical power equipment for data centers - which addresses a significant pain point for hyperscale and multi-tenant data center operators: deployment speed. By acquiring Fibrebond's off-site equipment installation and testing capabilities, Eaton strengthens its end-to-end power solutions portfolio while potentially accelerating customer deployment timelines.

While the deal is expected to be EPS-neutral in 2025, the strategic rationale is compelling given the ongoing AI-driven surge in data center construction. Fibrebond's $378 million in annual revenue represents only about 1.5% of Eaton's $25 billion revenue base, but provides targeted exposure to the multi-tenant data center segment where demand for rapid, flexible power infrastructure deployment is particularly acute.

The acquisition aligns perfectly with Eaton's twin strategic focus areas of electrification and digitalization, positioning the company to capture additional value from the expanding data infrastructure buildout without stretching its balance sheet.

DUBLIN--(BUSINESS WIRE)-- Intelligent power management company Eaton (NYSE:ETN) today announced it has signed an agreement to acquire Fibrebond Corporation, a designer and builder of pre-integrated modular power enclosures for data center, industrial, utility and communications customers. Under the terms of the agreement, Eaton will pay $1.4 billion for the acquisition of Fibrebond, which is expected to generate $110 million of estimated 2025 adjusted EBITDA.

“Fibrebond is known for its engineering capabilities and customer focus in the industries they serve, including the multi-tenant data center market,” said Mike Yelton, president, Americas Region, Electrical Sector. “Its engineered-to-order power enclosures, in which equipment installation and testing procedures are performed off-site, enables customers to get up-and-running in less time and at a lower cost. This full-service offering allows us to better serve our customers amid accelerating demand.”

Fibrebond Corporation, based in Minden, Louisiana, builds innovative and reliable structures that protect people and mission-critical equipment for data center, fiber, industrial, and utility markets. The company estimates revenues of approximately $378 million for the 12 months ending February 28, 2025.

The transaction, which is subject to customary closing conditions, is expected to close in the third quarter of 2025. Eaton expects the deal will be neutral from an earnings per share standpoint in 2025.

Eaton is an intelligent power management company dedicated to protecting the environment and improving the quality of life for people everywhere. We make products for the data center, utility, industrial, commercial, machine building, residential, aerospace and mobility markets. We are guided by our commitment to do business right, to operate sustainably and to help our customers manage power ─ today and well into the future. By capitalizing on the global growth trends of electrification and digitalization, we’re helping to solve the world’s most urgent power management challenges and building a more sustainable society for people today and generations to come.

Founded in 1911, Eaton has continuously evolved to meet the changing and expanding needs of our stakeholders. With revenues of nearly $25 billion in 2024, the company serves customers in more than 160 countries. For more information, visit www.eaton.com. Follow us on LinkedIn.

This press release contains forward-looking statements concerning, among other matters, the expected closing date of the acquisition of Fibrebond, estimated financial performance of Fibrebond for 2025 and the trailing 12-month period ending February 28, 2025, and the transaction’s impact on Eaton’s expected 2025 earnings per share. These statements should be used with caution and are subject to various risks and uncertainties, many of which are outside the company’s control. The following factors could cause actual results to differ materially from those in the forward-looking statements: potential global pandemics, unanticipated changes in the markets for the company’s or Fibrebond’s business segments; unanticipated downturns in business relationships with customers or their purchases from us or Fibrebond; competitive pressures on sales and pricing; continued supply chain disruptions, unanticipated changes in the cost of material, labor and other production costs, or unexpected costs that cannot be recouped in product pricing; the introduction of disruptive or competing technologies; unexpected technical or marketing difficulties; unexpected claims, charges, litigation or dispute resolutions; strikes or other labor unrest at Eaton, Fibrebond or at our customers or suppliers; the performance of recent acquisitions; unanticipated difficulties closing or integrating acquisitions, including Fibrebond; unexpected difficulties completing divestitures, new laws, tariffs and governmental regulations; interest rate changes; stock market and currency fluctuations; geo-political tensions, war, civil or political unrest or terrorism; and unanticipated deterioration of economic and financial conditions in the United States and around the world. We do not assume any obligation to update these forward-looking statements.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250310706904/en/

Jennifer Tolhurst

+1 (440) 523-4006

jennifertolhurst@eaton.com

Source: Eaton

FAQ

How much is Eaton (ETN) paying to acquire Fibrebond ?

Eaton is paying $1.4 billion to acquire Fibrebond

What is Fibrebond's projected revenue for the period ending February 2025?

Fibrebond estimates revenues of approximately $378 million for the 12 months ending February 28, 2025.

When is the Eaton-Fibrebond acquisition expected to close?

The acquisition is expected to close in the third quarter of 2025.

What is Fibrebond's estimated adjusted EBITDA for 2025?

Fibrebond is expected to generate $110 million of estimated adjusted EBITDA in 2025.

How will the Fibrebond acquisition impact Eaton's earnings per share in 2025?

The deal is expected to be neutral from an earnings per share standpoint in 2025.