SINGAPORE (dpa-AFX) - Flex Ltd. (FLEX), a manufacturing and technology solutions provider, said Monday it has agreed to sell $2 billion of preferred stock in Axiom Solutions International, the company's Cloud and Power Infrastructure segment.
The investment is led by funds affiliated with General Catalyst, alongside Koch Equity Development and co-investors, valuing Axiom at an initial enterprise value of $37.5 billion.
Flex said the investment will support Axiom as it prepares to operate as an independent company and capitalize on growing demand for AI infrastructure.
The convertible preferred stock will carry a 10% annual cash dividend before the separation and 6% in cash or 7% if paid in kind after the separation, subject to certain adjustments.
Net proceeds will be used to fund part of Axiom's pending acquisition of EPC Power, repay any equity bridge or other interim financing related to the acquisition, pay dividends on the preferred stock or for general corporate purposes. Flex noted that it has separately secured committed term loan financing for the remainder of the EPC Power acquisition.
General Catalyst will have the right to nominate one director to Axiom's board following completion of the separation.
Flex expects to complete the separation of Axiom into an independent, publicly traded company in the first quarter of calendar 2027.
FLEX shares were up more than 1% in pre-market trading after closing at $116.61 on Friday.
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