Flex announced October 5 that it has entered into an agreement to sell $2.0 billion of Series A Convertible Preferred Stock of Axiom Solutions International, its Cloud and Power Solutions subsidiary. The investment is led by General Catalyst, with Koch Equity Development and co-investors participating, at an initial enterprise value for Axiom of $37.5 billion.
The preferred stock pays a 10.0 percent dividend per annum in cash prior to the separation of Axiom. Flex said it intends to use net proceeds to fund a portion of the purchase price for its recently announced acquisition of EPC Power, a power-conversion company. General Catalyst will have the right to nominate one director to the Axiom board. Flex intends to separate Axiom into an independent, publicly traded company in the first quarter; the year was not confirmed in the materials reviewed.
The transaction frames Axiom as a dedicated vehicle for the AI power buildout rather than a balance-sheet project. Advisers were PJT Partners for Flex, with Skadden and Davis Polk on legal.