Flex Completes Acquisition of Crown Technical Systems

Rhea-AI Summary

Flex (NASDAQ: FLEX) has completed its $325 million all-cash acquisition of Crown Technical Systems, a leader in power distribution and protection systems. The acquisition enhances Flex's exposure to growing markets, including modular data center adoption and medium voltage power distribution, while extending its power portfolio into the utility power market. Crown Technical Systems is projected to generate approximately $120 million in revenue with high-teens EBITDA margin in fiscal 2025. The acquired company will be integrated into Flex's Industrial Business unit within the Reliability Solutions segment.

Positive

• All-cash acquisition worth $325 million strengthens market position
• Expected revenue contribution of $120 million in fiscal 2025
• High-teens EBITDA margin indicates strong profitability
• Expansion into fast-growing, margin accretive end-markets
• Enhanced presence in U.S. data center market

Negative

• Significant cash outlay of $325 million impacts immediate liquidity

News Market Reaction – FLEX

+6.70%

1 alert

+6.70% News Effect

On the day this news was published, FLEX gained 6.70%, reflecting a notable positive market reaction.

Data tracked by StockTitan Argus on the day of publication.

AUSTIN, Texas, Nov. 20, 2024 /PRNewswire/ -- Flex (NASDAQ: FLEX) announced today that it has completed its previously announced $325 million all-cash acquisition of Crown Technical Systems, a leader in fully integrated power distribution and protection systems.

The acquisition further increases Flex exposure to fast-growing, margin accretive end-markets, including modular data center adoption and medium voltage power distribution, and extends the company's power portfolio into the utility power market. Additionally, the deal strengthens Flex's critical power portfolio and supports further growth in the U.S. data center market.

"We are pleased to welcome the Crown Technical Systems team officially to Flex," said Revathi Advaithi, CEO, Flex. "This transaction strategically strengthens our unique EMS + Products + Services data center and power portfolio and expands our presence in high growth markets to help drive long-term value for our customers and shareholders."

Crown Technical Systems is expected to generate revenue of approximately $120 million and high-teens EBITDA margin in fiscal 2025, which ends on March 31, 2025. For reporting purposes, Crown Technical Systems will be included in the Industrial Business unit inside Flex's Reliability Solutions segment.

About Flex
Flex (Reg. No. 199002645H) is the manufacturing partner of choice that helps a diverse customer base design and build products that improve the world. Through the collective strength of a global workforce across 30 countries and responsible, sustainable operations, Flex delivers technology innovation, supply chain, and manufacturing solutions to diverse industries and end markets.

Contacts
Investors & Analysts 
David A. Rubin 
Vice President, Investor Relations 
(408) 577-4632 
David.Rubin@flex.com

Media & Press 
Jessica Anderson 
Director, Corporate Integrated Marketing and Communications 
(408) 577-4789
Jessica.Anderson@flex.com 

Forward-Looking Statements
This press release contains forward-looking statements within the meaning of U.S. securities laws, including statements related to the anticipated benefits of the acquisition of Crown Technical Systems such as revenue and EBITDA generation, and general business outlook. These forward-looking statements involve risks and uncertainties that could cause the actual results to differ materially from those anticipated by these forward-looking statements. Readers are cautioned not to place undue reliance on forward-looking statements. These risks include: the possibility that we may not fully realize the projected benefits of the acquisition in a timely manner or at all; business disruption following the acquisition; diversion of management time on acquisition- and integration-related issues; the combined operations may not be successfully integrated; the reaction of customers and other persons to the acquisition; and other events that could adversely impact the anticipated benefits of the acquisition, including industry or economic conditions outside of our control. In addition, actual results are subject to other risks and uncertainties that relate more broadly to our overall business, including those more fully described in our filings with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K and in our subsequent filings. The forward-looking statements in this press release are based on current expectations and Flex assumes no obligation to update any forward-looking statements.

 

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SOURCE Flex

FAQ

How much did Flex (FLEX) pay for Crown Technical Systems?

Flex paid $325 million in an all-cash transaction to acquire Crown Technical Systems.

What is the expected revenue of Crown Technical Systems for fiscal 2025?

Crown Technical Systems is expected to generate approximately $120 million in revenue for fiscal 2025, ending March 31, 2025.

Which segment will Crown Technical Systems operate under within Flex?

Crown Technical Systems will operate within the Industrial Business unit inside Flex's Reliability Solutions segment.

What markets will Flex expand into through the Crown Technical Systems acquisition?

The acquisition expands Flex's presence in modular data center adoption, medium voltage power distribution, and utility power markets.