U.S. Dollar banknotes are seen in this illustration taken July 17, 2022. REUTERS/Dado Ruvic/Illustration
(Reuters) -Hubbell said on Tuesday it will acquire smaller peer DMC Power for $825 million in cash, as the electrical equipment maker bolsters its critical components portfolio to meet an expected boom in power demand.
DMC designs and makes connector technology systems for high-voltage power infrastructure, and complements Hubbell's existing substation and transmission connector solutions, the acquiring firm said.
Growing demand for artificial intelligence has fueled investments into modern data centers, in turn boosting the requirement for power infrastructure and components, and benefiting manufacturers like Hubbell and DMC Power.
"As load growth, datacenter buildouts and aging infrastructure drive highly visible utility substation and transmission investment over the next several years, the acquisition of DMC Power expands Hubbell's strong presence in these attractive markets," said Hubbell CEO Gerben Bakker.
Last month, Hubbell raised its annual profit forecast banking on strong demand for its products.
DMC has more than 350 employees and two manufacturing facilities along with multiple distribution facilities located across North America, Hubbell said.
Hubbell expects the deal to close by the end of this year, and boost its adjusted earnings per share in 2026. It plans to finance the transaction with a combination of cash on hand and debt.
(Reporting by Anshuman Tripathy in Bengaluru; Editing by Leroy Leo)
