Flex Announces Agreement to Acquire Electrical Power Products (EP²)
Rhea-AI Summary
Flex (NASDAQ: FLEX) agreed to acquire Electrical Power Products (EP2) in an all-cash transaction valued at approximately $1.1 billion (about $1.0 billion after anticipated tax benefits). The deal expands Flex's Critical Power portfolio, adds a Midwest manufacturing campus in Des Moines, and brings deep utility and engineered-to-order capability.
EP2 is expected to generate roughly $323 million revenue for fiscal year ending March 31, 2026, with double-digit organic growth and mid-to-high-teens adjusted EBITDA margins. The acquisition is expected to be accretive to adjusted EPS in the first full fiscal year after close and is targeted to close in Flex's FY2027 Q1, subject to customary closing conditions including Hart-Scott-Rodino clearance.
Positive
- Transaction value of approximately $1.1 billion (all-cash)
- Deal expected to be accretive to adjusted EPS in first full fiscal year after close
- EP2 reported ~$323 million revenue for fiscal year ending March 31, 2026
- EP2 targets mid-to-high-teens adjusted EBITDA margin and double-digit organic growth
- Midwest manufacturing footprint added via EP2 campus in Des Moines, Iowa
Negative
- Closing is subject to customary conditions, including Hart-Scott-Rodino clearance, creating regulatory timing risk
News Market Reaction – FLEX
On the day this news was published, FLEX declined 6.53%, reflecting a notable negative market reaction.
Data tracked by StockTitan Argus on the day of publication.
Key Figures
Market Reality Check
Peers on Argus
FLEX’s modest 0.06% move contrasts with several peers posting larger gains, e.g., CLS up 3.53%, FN up 1.55%, and GLW up 1.03%. No peers appeared in the momentum scanner, supporting this as a stock-specific event rather than a broad sector rotation.
Previous Acquisition Reports
| Date | Event | Sentiment | Move | Catalyst |
|---|---|---|---|---|
| Sep 08 | Solar acquisition | Positive | +0.6% | Nextracker acquired Origami Solar in a $53M all-cash transaction. |
| Nov 20 | Acquisition completion | Positive | +6.7% | Flex completed its $325M all-cash acquisition of Crown Technical Systems. |
| Nov 14 | Cooling acquisition | Positive | -1.2% | Flex acquired JetCool to expand data center liquid cooling offerings. |
| Oct 17 | Planned acquisition | Positive | +1.7% | Flex announced plan to acquire Crown Technical Systems for $325M in cash. |
| Jun 20 | Foundations acquisition | Positive | -3.2% | Nextracker acquired Ojjo to expand utility-scale solar foundation solutions. |
Acquisition-related headlines in this group have generally produced modest single-day moves, with a mix of aligned and divergent reactions to otherwise positive strategic news.
Over the past year, acquisition news across Flex and related peers has focused on expanding capabilities in power, cooling, and renewable infrastructure. Notable deals include Flex’s $325 million Crown Technical Systems acquisition and its earlier announcement of that deal, plus Flex’s purchase of JetCool to deepen data center cooling solutions. Nextracker has also pursued bolt-on acquisitions in solar frames and foundations. Price reactions have mostly been moderate, with both positive and negative moves following generally constructive strategic announcements.
Historical Comparison
In the last 5 acquisition-related announcements in this ecosystem, the average 1-day move was about 0.93%, indicating generally measured market reactions to M&A news.
Flex’s recent deals, including Crown Technical Systems and JetCool, show a continued build-out of power distribution and advanced cooling capabilities, while peer Nextracker has expanded in solar frames and foundations—together highlighting a strategy of adding specialized infrastructure assets.
Market Pulse Summary
The stock moved -6.5% in the session following this news. A negative reaction despite strategically framed M&A news would fit historical instances where some acquisitions, like JetCool and Ojjo, saw share price declines. Investors may reassess deal valuation versus EP2’s expected $323 million revenue or integration risk. With prior acquisition-related moves averaging about 0.93%, a sharp decline could reflect near-term skepticism rather than a definitive verdict on long-term strategic fit.
Key Terms
all-cash transaction financial
adjusted eps financial
organic growth financial
ebitda margin financial
hart-scott-rodino act regulatory
AI-generated analysis. Not financial advice.
News summary
- Leader in engineered‑to‑order electrical power control and protection systems
- Significantly expands Flex's Critical Power portfolio with deep utility, power generation, and industrial expertise
- Adds strong engineering talent, major Midwest manufacturing footprint, and long‑term customer relationships
EP2 has more than 35 years of experience designing, integrating, and manufacturing highly engineered control and relay panels and modular, integrated control buildings for utility, power generation, and industrial customers. EP2 serves a diverse set of longstanding customers and operates a scaled manufacturing campus in
"The addition of EP2 expands our capabilities to play a larger role in modernizing the electrical backbone of the
"This agreement positions EP2 to accelerate growth while continuing our customer focused, engineering driven culture," said Tim O'Donnell, President of EP2. "Flex's scale, global capabilities, and commitment to investment support long‑term opportunity for our employees and customers. We look forward to joining Flex and building on our momentum."
This acquisition complements and expands Flex's exposure to high-growth, margin-accretive end markets shaped by long-term trends such as grid modernization, electrification, data center buildout, and
EP2 is expected to generate revenue of approximately
Flex management will further discuss the acquisition on its upcoming earnings call.
Citi is serving as exclusive financial advisor to Flex. RA Capital Associates LLC is serving as exclusive financial advisor to Electrical Power Products, Inc.
About Flex
Flex (Reg. No. 199002645H) is the manufacturing partner of choice that helps a diverse customer base design and build products that improve the world. Through the collective strength of a global workforce across 30 countries and responsible, sustainable operations, Flex delivers technology innovation, supply chain, and manufacturing solutions to diverse industries and end markets.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Words such as "anticipate," "believe," "expect," "intend," "may," "plan," "project," "will," and similar expressions identify forward-looking statements. These forward-looking statements include statements related to our planned acquisition of Electrical Power Products, Inc., the expected timing of the closing of the acquisition, the anticipated benefits of the acquisition, and our general business outlook. These forward-looking statements are based on current expectations, estimates, and assumptions involving risks and uncertainties that could cause actual outcomes and results to differ materially from those anticipated. Readers are cautioned not to place undue reliance on forward-looking statements. These risks include, among others: the failure to obtain, or delays in obtaining, required regulatory or other approvals or to satisfy other closing conditions on a timely basis or at all; the possibility that the transaction will not close or that the closing may be delayed; costs, expenses, or liabilities related to the transaction, whether or not consummated; disruption to our business as a result of the transaction; the inability to retain key personnel; diversion of management's attention from ongoing business operations; difficulties in integrating the acquired business; and the risk that expected benefits of the acquisition may not be realized or may take longer to realize than expected. In addition, actual results are subject to other risks and uncertainties relating to our business, including those more fully described in our filings with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and other filings we make with the SEC. All forward-looking statements in this press release are made as of the date hereof, and Flex undertakes no obligation to update or revise any forward-looking statements, except as required by applicable law.
Media contacts
Investors & Analysts
Michelle Simmons
Senior Vice President, Global Investor Relations and Public Relations
(669) 242-6332
Michelle.Simmons@flex.com
Media & Press
press@flex.com
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SOURCE Flex