Axiom Solutions International has secured a $2 billion convertible preferred equity investment led by General Catalyst and Koch Equity Development, along with co-investors, at an initial enterprise value of $37.5 billion.
Axiom is currently Flex’s Cloud and Power Infrastructure segment and is expected to be separated into an independent publicly traded company during the first quarter of 2027.
Funds affiliated with General Catalyst, Koch Equity Development and participating co-investors agreed to purchase $2 billion of Series A Convertible Preferred Stock in Axiom.
On a pro forma basis following the separation, the investment will be entirely in Axiom.
The proceeds are expected to help finance Axiom’s previously announced acquisition of EPC Power and provide the company with additional balance-sheet capacity as it prepares to become independent.
Net proceeds can be used to fund part of the EPC Power purchase price, repay equity bridge or other intermediate financing related to that acquisition, pay dividends on the preferred stock or support general corporate purposes.
Flex separately secured committed term-loan financing for the remaining portion of the EPC Power transaction.
The preferred stock will initially pay a 10% annual cash dividend before the separation.
Following the separation, the dividend will step down to 6% annually if paid in cash or 7% if paid in kind, subject to potential increases after the fifth anniversary of the separation and other adjustments.
General Catalyst will also receive the right to nominate one director to Axiom’s board after the separation is completed.
The investment remains subject to customary regulatory approvals and closing conditions.
Flex expects Axiom to focus on power, thermal and compute infrastructure supporting growing artificial intelligence infrastructure demand.
PJT Partners is serving as financial adviser and Skadden, Arps, Slate, Meagher & Flom is providing legal counsel to Flex.
Davis Polk & Wardwell is serving as legal counsel to General Catalyst.
KEY QUOTES:
“This investment provides equity funding for our recently announced acquisition of EPC Power and will allow Axiom to have a strong balance sheet as we prepare to stand up as an independent, publicly traded company squarely focused on the power, thermal, and compute infrastructure the AI era demands. General Catalyst brings deep conviction in applied AI and a long track record partnering with companies building category-defining leaders, and we’re glad to have them partner with us as Axiom enters its next chapter. This transaction reflects the value we see in Axiom’s business today and will translate into lasting value for Flex shareholders as the separation comes together.”
Revathi Advaithi, Chief Executive Officer of Flex and Expected Chief Executive Officer of Axiom
“Axiom sits at the center of the power and infrastructure buildout that AI demands, and we’ve been impressed by the team’s execution and the scale of the opportunity ahead. We look forward to partnering with Axiom for the long term as it becomes an independent company and continues to invest in the technology and capacity this next phase of growth requires.”
Hemant Taneja, Chief Executive Officer of General Catalyst
“AI diffusion requires modern power solutions at scale. Under Revathi’s leadership, we believe Axiom will become the defining power company of the AI era.”
Madhu Namburi, Managing Director at General Catalyst
