Flex to spin off cloud and power infrastructure business
US electronics manufacturer Flex will split into two independent publicly traded companies, separating its fast-growing cloud and power infrastructure segment from its core contract manufacturing operations. The transaction is targeted to close in the first quarter of 2027.
Flex's board has unanimously approved a plan to spin off its Power and Cloud portfolio into a new, independently listed company – named SpinCo – leaving the remaining Flex business to operate as a focused manufacturing partner.
The separation reflects a strategic logic that has been building for some time. Flex has spent the better part of seven years repositioning itself as a technology-focused industrial manufacturer, and the cloud and power infrastructure segment has grown into a distinct business with its own customer base, capital requirements and growth trajectory.
"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," says Revathi Advaithi, CEO of Flex, in a press release.
The new entity will focus on end-to-end power and thermal management solutions for AI data centres and other mission-critical applications – integrating power distribution, cooling and compute at the system level. Flex is targeting revenue growth of 65% to 75% for SpinCo in fiscal 2027, accelerating to above 80% in fiscal 2028.
Current Flex CEO Revathi Advaithi will move to lead SpinCo, and will serve as Chairman of Flex's board for a transitional period following the split.
Flex to focus on advanced manufacturing
The remaining Flex business will be organised into two segments – Integrated Technology Solutions and Regulated Manufacturing Solutions – serving healthcare, industrial, automotive, communications and lifestyle markets.
With more than 75 manufacturing and logistics sites across 30 countries, the company is positioning itself as a manufacturing partner for customers navigating supply chain disruption and growing regionalisation requirements.
Michael Hartung, who has been with the company for more than 20 years, will become CEO of Flex following the spin-off.
Flex, excluding SpinCo, is expected to be strongly positioned for low-to-mid-single-digit growth, continued margin expansion and strong cash generation.
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