Flex Announces Intention to Spin Off its Cloud and Power Infrastructure Segment into a New Independent Publicly Traded Company

Rhea-AI Summary

Flex (NASDAQ: FLEX) will spin off its Power and Cloud portfolio into a new publicly traded company (“SpinCo”), targeting a tax-free separation that is expected to close in Q1 2027. Revathi Advaithi will become CEO of SpinCo and transitional chairman of Flex; Michael Hartung will be CEO of Flex.

SpinCo targets ~65%–75% revenue growth in fiscal 2027 and >80% in fiscal 2028, and will operate 22 engineering and manufacturing centers. Flex will remain a global manufacturing partner with >75 sites across 30 countries.

Positive

• SpinCo targets ~65%–75% revenue growth in fiscal 2027
• SpinCo operates 22 engineering and manufacturing centers globally
• Flex operates more than 75 manufacturing and logistics sites across 30 countries
• Transaction intended to be tax-free to shareholders, targeted Q1 2027 close

Negative

• Flex ex-SpinCo expected low-to-mid-single-digit revenue growth post spin-off
• SpinCo growth targets imply rapid scale-up and execution demands in 2027–2028

Market Reaction – FLEX

+12.05% $108.07

15m delay 32 alerts

+12.05% Since News

$108.07 Last Price

$92.63 $110.00 Day Range

+$3.81B Valuation Impact

$35.46B Market Cap

0.1x Rel. Volume

Following this news, FLEX has gained 12.05%, reflecting a significant positive market reaction. Our momentum scanner has triggered 32 alerts so far, indicating elevated trading interest and price volatility. The stock is currently trading at $108.07. This price movement has added approximately $3.81B to the company's valuation.

Data tracked by StockTitan Argus (15 min delayed). Upgrade to Gold for real-time data.

Key Figures

SpinCo FY27 growth: 65%–75% revenue growth SpinCo FY28 growth: 80%+ revenue growth Credit facility: $1.45 billion +5 more

8 metrics

SpinCo FY27 growth 65%–75% revenue growth Flex target for SpinCo in fiscal 2027

SpinCo FY28 growth 80%+ revenue growth Flex target for SpinCo in fiscal 2028

Credit facility $1.45 billion Senior delayed draw term loan commitment disclosed in 8-K on 2026-05-04

EP² deal value approximately $1.1 billion All-cash acquisition value including anticipated tax benefits

EP² revenue approximately $323 million Expected revenue for fiscal year ending March 31, 2026

Vanguard ownership 19,736,244 shares (5.36%) Vanguard Capital Management Schedule 13G as of 03/31/2026

Vanguard ownership 19,382,770 shares (5.27%) Vanguard Portfolio Management LLC Schedule 13G as of 03/31/2026

Insider sale 17,500 shares at $58.87 COO Tan Kwang Hooi open-market sale on March 9, 2026

Market Reality Check

Price: $91.84 Vol: Volume 2,583,973 is at 0....

normal vol

$91.84 Last Close

Volume Volume 2,583,973 is at 0.7x the 20-day average of 3,706,025 shares. normal

Technical Shares at 91.84, trading above the 200-day MA of 62.54 and 1.81% below the 52-week high of 93.53.

Peers on Argus

FLEX is up 0.15% while peers show mixed moves: JBL up and GLW down, and other li...

1 Up 1 Down

FLEX is up 0.15% while peers show mixed moves: JBL up and GLW down, and other listed peers mostly negative. This pattern indicates the reaction to the spin-off plan is more stock-specific than sector-driven.

Historical Context

5 past events · Latest: May 04 (Positive)

Pattern 5 events

Date	Event	Sentiment	Move	Catalyst
May 04	Acquisition closing	Positive	+0.1%	Completed EP² acquisition to expand engineered-to-order electrical power capabilities.
Apr 22	Automation partnership	Positive	-0.3%	Expanded Teradyne Robotics partnership to scale intelligent automation globally.
Apr 21	Earnings date notice	Neutral	-0.3%	Announced Nextpower’s timing for Q4 and full-year 2026 financial results.
Apr 15	Earnings date notice	Neutral	+1.9%	Set FLEX’s Q4 and fiscal 2026 earnings release and conference call date.
Apr 07	Program launch	Positive	+0.8%	kWh Analytics launched a hail-readiness data-sharing pilot with Nextpower.

Pattern Detected

Recent FLEX-related news (acquisition, partnership, earnings date) has mostly seen aligned price moves, with only one divergence on a positive partnership headline.

Recent Company History

Over the last month, FLEX has announced several strategic steps. On Mar 30, 2026, it agreed to acquire Electrical Power Products (EP²), later completing the deal on May 4, 2026. The acquisition broadens engineered-to-order power control offerings for utilities, power generation, and data centers. FLEX also expanded an automation partnership with Teradyne Robotics and set dates for fiscal 2026 earnings. Today’s spin-off plan fits into this broader portfolio reshaping toward critical power and technology-focused industrial operations.

Market Pulse Summary

This announcement outlines a plan to separate FLEX’s Power and Cloud portfolio into a new AI-focused...

Analysis

This announcement outlines a plan to separate FLEX’s Power and Cloud portfolio into a new AI-focused infrastructure company while retaining a streamlined manufacturing business. The move follows the EP² acquisition and a new $1.45 billion credit facility, reinforcing a multi-step portfolio strategy around critical power and industrial technology. Investors may watch for detailed financials on SpinCo’s targeted 65%–75% and 80%+ revenue growth, the tax-free structure, governance transitions, and how remaining FLEX maintains margins and capital returns once the transaction completes in the first quarter of calendar 2027.

Key Terms

restricted share units, rule 10b5-1(c) trading plan, form 144, schedule 13g, +3 more

7 terms

restricted share units financial

"he was awarded 519 ordinary shares through restricted share units under Flex’s Share"

Restricted share units (RSUs) are a promise from a company to give an employee or service provider actual shares or cash equal to the shares after certain conditions are met, typically staying with the company for a set time or hitting performance targets. Think of them like a time-locked gift card that becomes usable only after you’ve earned it. For investors, RSUs matter because they align employee incentives with company performance and can increase the number of shares outstanding over time, diluting existing ownership and affecting earnings per share.

rule 10b5-1(c) trading plan regulatory

"The sale was made under a pre-arranged Rule 10b5-1(c) trading plan adopted on"

A Rule 10b5-1(c) trading plan is a legally defined, pre-set schedule that lets company insiders automatically buy or sell stock at specified times or under set formulas when they are not in possession of undisclosed, sensitive information. Think of it like an automatic payment plan for trades: because the instructions are written in advance, trades under the plan help protect insiders from allegations of trading on secret information and give investors clearer expectations about when insiders will transact, which can affect liquidity and perceived transparency.

form 144 regulatory

"The filing is a Form 144 notice tied to common stock held at Fidelity"

Form 144 is a document that investors must file with the government when they plan to sell a large number of shares of a company's stock. It helps ensure transparency so everyone knows how many shares are being sold and when, which can impact the stock's price.

schedule 13g regulatory

"[SCHEDULE 13G] FLEX LTD. Passive Investment Disclosure (>5%)"

A Schedule 13G is a formal document that investors file with the government when they acquire a large ownership stake in a company, usually for investment purposes rather than control. It helps keep the public informed about who owns significant parts of a company's shares, which can influence how the company is managed and how investors make decisions. Filing this schedule is important for transparency and understanding the ownership landscape of publicly traded companies.

schedule 13g/a regulatory

"[SCHEDULE 13G/A] FLEX LTD. Amended Passive Investment Disclosure"

A Schedule 13G/A is an amended public filing with the U.S. securities regulator that updates a previous Schedule 13G, disclosing when an individual or group holds a substantial (typically over 5%) stake in a company and is claiming a passive, non‑controlling intent. Investors monitor these updates because rising or falling holdings can signal changing confidence, potential future moves, or shifts in voting power — like watching a public ledger where large shareholders quietly adjust their positions.

term sofr financial

"bears floating interest based on Term SOFR or a Base Rate plus a margin"

Term SOFR is a benchmark interest rate that reflects the cost of borrowing money over a specific period, based on actual transactions in the financial markets. It is used by lenders and borrowers to set the interest rates on loans and financial contracts, helping to ensure rates are fair and transparent. For investors, understanding term SOFR helps gauge borrowing costs and the overall direction of interest rates in the economy.

debt/ebitda ratio financial

"such as a maximum Debt/EBITDA Ratio of 4.00 to 1.00 and a minimum"

The debt/EBITDA ratio measures a company’s total interest-bearing debt divided by its EBITDA, a common proxy for the cash a business generates from operations before interest, taxes and non-cash accounting charges. It tells investors roughly how many years’ worth of operating earnings would be needed to pay off the debt; a lower ratio implies easier debt management and lower financial risk, while a higher ratio suggests tighter cash flow and greater default or refinancing risk.

AI-generated analysis. Not financial advice.

Spin-off will create two companies with distinct growth strategies that are poised to drive significant customer and shareholder value

News summary

• The new company ("SpinCo") will be a high-growth critical digital and electrical infrastructure company, delivering end-to-end power and thermal management technologies and integrated infrastructure systems for AI data centers and mission-critical applications.
• Flex will continue as a leading advanced manufacturing company, designing and building highly complex products and services at global scale for premier brands across diversified end markets, with a disciplined focus on portfolio optimization, durable cash flow, and shareholder returns.
• Revathi Advaithi will become CEO of SpinCo. She will also serve as Chairman of the Board of Directors of Flex for a transitional period upon the completion of the spin-off.
• Michael Hartung will be named CEO of Flex.
• Transaction intended to be tax-free to shareholders and targeted to close in the first quarter of calendar 2027.

AUSTIN, Texas, May 5, 2026 /PRNewswire/ -- Flex (NASDAQ: FLEX) today announced that its Board of Directors has unanimously approved moving forward with a plan to spin off its Power and Cloud portfolio from Flex, creating two independent, publicly traded companies, each optimally positioned to serve their customers and create value for their shareholders.

"Today's announcement is the next step in a deliberate transformation that has reshaped Flex into a technology-focused industrial company over the past seven years," said Revathi Advaithi, Chief Executive Officer of Flex. "By creating two focused, independent companies, we are giving SpinCo the platform to build and scale the products and digital infrastructure that the world's most demanding AI workloads depend on, and Flex the focus to deliver advanced manufacturing solutions at global scale for diversified industries. We believe each company will have the strategic clarity and dedicated leadership to drive exceptional outcomes for its respective customers and shareholders. I'm excited to be part of the journey for both companies."

Benefits of the spin-off

As separate companies, SpinCo and Flex are expected to benefit from:

• Sharpened strategic focus and execution
• Distinct financial profiles and capital allocation policies
• Improved transparency around performance and expectations
• Unique investment approaches to fund long-term profitable growth

Two leading companies with distinct growth strategies

SpinCo: A global leader in critical digital infrastructure, delivering end-to-end power and thermal management technologies for AI data centers and mission-critical applications

SpinCo enables the scalable and reliable deployment of high-density digital and electrical infrastructure for diverse end markets like AI data centers and utilities. By integrating power, cooling, and compute at the system level, SpinCo delivers coordinated, system-level solutions designed to replace fragmented, multi-vendor approaches—enabling customers to achieve faster time-to-capacity, improved infrastructure reliability, and scalable performance as power densities and thermal complexity continue to increase.

SpinCo is well positioned to benefit from long-duration secular trends, including electrification, rising power intensity, and increasing infrastructure complexity. These dynamics are driving a sustained, multi-year buildout of digital infrastructure, particularly as artificial intelligence adoption accelerates. With a differentiated technology portfolio spanning power distribution, thermal management, and integrated infrastructure systems, from grid to chip, deep customer relationships, and a globally integrated engineering, manufacturing, and service model spanning 22 engineering and manufacturing centers, SpinCo is positioned to grow share and pursue targeted acquisitions to expand its capabilities.

As an independent company with experienced leadership and dedicated capital allocation, SpinCo will have the operational focus and strategic flexibility to execute on its growth opportunities. Flex is targeting SpinCo to generate approximately 65% - 75% revenue growth in fiscal 2027, with an acceleration to 80%+ in fiscal 2028.

Flex: A future-ready manufacturing partner designed for speed, scale, and resilience

Following the spin-off, Flex will continue to operate as a leading global manufacturing partner organized into two segments—Integrated Technology Solutions and Regulated Manufacturing Solutions—delivering design, vertically integrated manufacturing, and supply chain solutions enabled by automation, digital factories, and advanced processes. The company will serve the healthcare, industrial, automotive, communications, and lifestyle end markets. As customers face increasing product complexity, tighter development timelines, and growing regionalization requirements, Flex will help accelerate time to market and enable global scale through its end-to-end capabilities. With more than 75 manufacturing and logistics sites across 30 countries, Flex provides customers with sourcing flexibility and operational resilience amid ongoing supply chain and geopolitical disruptions. Following the spin-off, the company is expected to continue to be well-positioned to benefit from long-term secular growth trends, including the expansion of connected medical devices, drug delivery systems, energy infrastructure, robotics, satellite communications, and advanced networking. With a simplified portfolio and sharper strategic focus, we believe Flex is positioned to expand margins and actively optimize its portfolio toward higher-growth opportunities—driving strong cash flow and shareholder returns over the next few years.

Flex, excluding SpinCo, is expected to be strongly positioned for low-to-mid-single-digit growth, continued margin expansion, cash generation, and a robust capital return framework.

"After more than 20 years with the company, I'm honored to help lead Flex into its next chapter," said Michael Hartung. "We're well positioned to build on our longstanding foundation of global scale, operational excellence, and deep customer partnerships across regulated and technology-driven industries. By remaining focused on our strategic priorities and executing our proven playbook, we will continue to be the global manufacturer behind the products and systems that keep the world running, while delivering meaningful, long-term value for our customers and shareholders."

Additional details of the transaction will be posted on the company's website.

Citi, PJT Partners and BofA Securities are serving as financial advisors to Flex in connection with the spin-off.

Media, Investors, & Analysts

Michelle Simmons
Senior Vice President, Global Investor Relations and Public Relations
(669) 242-6332
michelle.simmons@flex.com

Media
press@flex.com

Dan Moore / Ed Hammond / Clayton Erwin
Flex-CS@collectedstrategies.com

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, without limitation, statements regarding the planned spin-off of our cloud and power infrastructure business into an independent, publicly traded company; the expected timing of the spin-off and the ability to complete the spin-off; the anticipated benefits of the spin-off, including enhanced strategic focus, financial flexibility, and value creation for shareholders; the expected tax-free treatment of the spin-off for U.S. federal income tax purposes; the expected future performance of each company following completion of the spin-off; management changes and leadership of each company; and statements about business strategies, growth opportunities, market position, and financial outlook for each company. 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 by these forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements.

Risks and uncertainties related to the proposed spin-off include, but are not limited to: uncertainties as to whether the spin-off will be completed and the timing thereof; the possibility that various conditions to the completion of the spin-off may not be satisfied or waived; the possibility that the spin-off will not qualify for the expected tax-free treatment for U.S. federal income tax purposes; the risk that the spin-off may be more difficult, time-consuming, or costly than expected, including the impact on Flex's resources, systems, procedures, and controls; the possibility that the strategic, operational, and financial benefits of the spin-off may not be achieved or may take longer to achieve than expected; the failure to obtain, or delays in obtaining, required legal, regulatory or other approvals necessary to complete the spin-off; disruption from the spin-off, including potential adverse effects on relationships with customers, suppliers, employees, and other business partners; competitive responses to the announcement or completion of the spin-off; diversion of management's attention from ongoing business operations; the possibility of disputes, litigation, or unanticipated costs in connection with the spin-off; uncertainty regarding the financial performance of either company following the spin-off; negative effects of the announcement or pendency of the spin-off on the market price of Flex's securities and/or on Flex's financial performance; the ability to achieve anticipated capital structures, credit ratings, and financing in connection with the spin-off; the ability to retain key personnel; impacts of geopolitical conflicts; and any changes in general economic and/or industry-specific conditions. Additional information concerning risks relating to our business is described under "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our most recent Annual Report on Form 10-K and in our subsequent filings with the U.S. Securities and Exchange Commission. All forward-looking statements are made as of the date hereof, and Flex assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by applicable law.

 

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SOURCE Flex

FAQ

What will change for Flex (FLEX) after the spin-off announced May 5, 2026?

Flex will separate its Power and Cloud portfolio into a new public company, SpinCo. According to the company, Flex will continue as a manufacturing-focused business organized into Integrated Technology Solutions and Regulated Manufacturing Solutions, serving diversified end markets worldwide.

Who will lead SpinCo and Flex after the spin-off of FLEX assets?

Revathi Advaithi will become CEO of SpinCo and transitional chairman of Flex; Michael Hartung will be CEO of Flex. According to the company, these leadership roles will take effect upon completion of the spin-off.

When is the FLEX spin-off expected to close and will it be taxable?

The company is targeting a tax-free spin-off that is expected to close in Q1 2027. According to the company, transaction details and timing are subject to customary conditions and regulatory requirements.

What growth does SpinCo expect after the separation from FLEX?

SpinCo is targeting approximately 65%–75% revenue growth in fiscal 2027 and an acceleration to over 80% in fiscal 2028. According to the company, SpinCo will focus on power, thermal management, and integrated infrastructure systems.

How will the spin-off affect Flex’s global footprint and operations?

Post spin-off, Flex will remain a global manufacturer with more than 75 sites across 30 countries. According to the company, Flex will focus on advanced manufacturing for healthcare, industrial, automotive, communications, and lifestyle markets.