NEW YORK, September 5, 2026, 5:24 a.m. EDT — Flex Ltd. NASDAQ:FLEX gained $598 million in market value Friday after committing $4.4 billion in cash to buy EPC Power.
The industrial logic won an early vote. The financing did not. Flex has fixed the purchase price while leaving its future mix of debt and new equity open.
At Friday’s $109.51 close, the deal equals 10.9% of Flex’s equity value. It also values EPC at 5.5 times management’s expected 2026 revenue. A richer number comes later: about 13.1 times estimated 2027 EBITDA.
The opening pop did not hold
Flex on September 4; selected regular-session observations in U.S. dollars
As of . Source: Nasdaq; selected observations by TS2.
Shares touched $111.60 at 10 a.m., then slipped below the prior close. They recovered into the bell on 4.49 million shares. That path looks more like a cautious endorsement than a takeover celebration.
The obligation itself is clear. Flex’s filed purchase agreement calls for $4.4 billion of aggregate cash consideration. It uses a June 30 locked-box valuation.
Citi and Bank of America committed an unsecured 364-day bridge for the full amount. Flex says permanent funding will combine debt and equity. No split, coupon or issuance price has been disclosed.
The undisclosed financing mix changes the owner’s outcome
Illustrative endpoints; equity priced at $109.51 and debt costed at Flex’s June 4.8% average rate
These are boundary cases, not management guidance. The actual equity price, debt rate, cash contribution and allocation between Flex and SpinCo may differ.
Sources: Flex’s September 3 filing and June 26 balance sheet. Calculations by TS2.
The equity endpoint would require 40.2 million shares at Friday’s price. That would expand the June share count by 10.9%. It is a boundary calculation, rather than a forecast.
The debt endpoint is equally stark. June borrowings stood at $5.2 billion against $2.84 billion of cash. Adding $4.4 billion at the reported 4.8% average rate would create $211 million of annual pretax interest.
Flex is paying up for speed and margin. Its deal announcement projects $800 million of EPC revenue this year. Management expects roughly 40% organic growth in 2027 and an EBITDA margin near 30%.
A $4.4 billion price rests on next year’s forecast
Company estimates for EPC Power; 2027 figures derived from stated growth and margin
EPC’s 2027 revenue and EBITDA are preliminary estimates. Organic growth can miss, and EBITDA excludes costs that matter to equity holders.
Source: Flex’s transaction presentation. Calculations by TS2.
Apply those forecasts mechanically and 2027 revenue reaches $1.12 billion. EBITDA approaches $336 million. The 13.1-times purchase multiple is reasonable only if that step-up arrives.
Chief Executive Revathi Advaithi described “a generational shift in power architecture.” Her point is physical. New AI racks need high-voltage conversion, cooling and rapid responses to unstable loads.
EPC says its M System exceeds 99% efficiency and 99.9% availability. The platform uses silicon-carbide modules and grid-forming controls. EPC Chief Executive Jim Fusaro says customers need systems that are “more intelligent, efficient and resilient.”
Nvidia Corporation NASDAQ:NVDA is helping move the industry toward 800-volt direct-current racks. Flex already supplies power, cooling and compute equipment around that architecture. EPC fills the grid-conversion gap closer to the utility connection.
The target is small beside Flex’s existing cloud-and-power operation. That segment produced $2.20 billion of June-quarter sales, up 35%. Segment income rose 38% to $214 million, while margin edged up to 9.7%.
EPC’s projected 30% EBITDA margin could improve the mix. Direct comparison has limits because Flex reports segment income under a different measure. Integration costs will also land before all planned benefits.
The financing clock runs beside the spin-off clock
Flex’s disclosed sequence from deal announcement to planned separation
The documents investors still need: permanent financing terms, pro forma share count, debt allocation, interest burden and EPC’s audited contribution.
Sources: Flex’s transaction resources and July separation update.
The calendar adds pressure. EPC should close in the fourth quarter. Flex still targets the Cloud and Power Infrastructure separation for early 2027. Refinancing, integration and debt allocation must therefore move together.
A Form 10 is planned this month, followed by a November 10 investor day. Those documents should reveal the future company’s capital structure. They now carry more weight than another product demonstration.
Wall Street remains constructive. Barclays analyst Tim Long kept a Buy rating and $144 target Friday, according to S&P Global and TipRanks data carried by StockAnalysis. The wider 11-analyst average stood at $160.50.
The balance sheet deserves equal attention. First-quarter free cash flow fell to $41 million from $268 million. Flex had already borrowed $1.45 billion for another power acquisition completed in May.
A heavier debt load could raise interest expense and constrain the separated company. More equity would dilute current owners. The company’s own filing flags credit-rating and capital-structure risks, along with regulatory and integration uncertainty.
Friday’s verdict was measured. Strategic fit added almost $600 million to Flex’s market value. The next move depends on a less glamorous document: the one showing how much stock existing holders must absorb and which balance sheet carries the debt.
