Flex said it has agreed to sell $2.0 billion of Series A convertible preferred stock in Axiom Solutions International, its cloud and power infrastructure segment, in a deal led by General Catalyst and Koch Equity Development.
The investment values Axiom at an initial enterprise value of $37.5 billion.
The preferred stock carries a 10.0% annual cash dividend before the separation. After the separation, the dividend steps down to 6.0% in cash or 7.0% if paid in kind, with possible increases after the fifth anniversary.
Flex said the proceeds will help fund part of Axiom’s pending acquisition of EPC Power, repay any bridge financing tied to that acquisition, pay dividends on the preferred stock, or be used for general corporate purposes. Flex also said it has already secured committed term loan financing for the rest of the EPC Power purchase.
The company said it expects to separate Axiom into an independent, publicly traded company in the first quarter of calendar 2027.
As part of the transaction, General Catalyst will have the right to nominate one director to Axiom’s board after the separation.
Flex said the strategic investment is aimed at supporting Axiom’s growth as demand rises for AI-related power, thermal, and compute infrastructure. The market has reacted to these announcements by moving the company's shares 3.4% to a price of $116.61. For the full picture, make sure to review FLEX's 8-K report.
