Flex Announces $2.0 Billion Convertible Preferred Investment into Axiom Led by General Catalyst with Koch Equity Development

Transaction Highlights:Strategic investment from General Catalyst, Koch Equity Development, and co-investors to support long-term growth at Axiom, Flex's Cloud and Power Infrastructure segment $2.0 billion convertible preferred equity investment is at an initial enterprise value for Axiom of $37.5 billion Flex intends to separate Axiom into an independent, publicly traded company in the first quarter of calendar 2027Flex (NASDAQ: FLEX) announced today that it has entered into an agreement to sell $2.0 billion of shares of Series A Convertible Preferred Stock of Axiom Solutions International, Inc. (Axiom), Flex's Cloud and Power Infrastructure segment, to funds affiliated with General Catalyst, Koch Equity Development, and co-investors. Through this strategic investment, Axiom will be positioned to further capitalize on the growing AI infrastructure demand as it prepares to operate as an independent company. Pro-forma for the separation, the investment will be solely in Axiom."This investment provides equity funding for our recently announced acquisition of EPC Power and will allow Axiom to have a strong balance sheet as we prepare to stand up as an independent, publicly traded company squarely focused on the power, thermal, and compute infrastructure the AI era demands," said Revathi Advaithi, Chief Executive Officer of Flex and expected Chief Executive Officer of Axiom. "General Catalyst brings deep conviction in applied AI and a long track record partnering with companies building category-defining leaders, and we're glad to have them partner with us as Axiom enters its next chapter. This transaction reflects the value we see in Axiom's business today and will translate into lasting value for Flex shareholders as the separation comes together.""Axiom sits at the center of the power and infrastructure buildout that AI demands, and we've been impressed by the team's execution and the scale of the opportunity ahead," said Hemant Taneja, Chief Executive Officer, General Catalyst. "We look forward to partnering with Axiom for the long term as it becomes an independent company and continues to invest in the technology and capacity this next phase of growth requires.""AI diffusion requires modern power solutions at scale," said Madhu Namburi, Managing Director, General Catalyst. "Under Revathi's leadership, we believe Axiom will become the defining power company of the AI era."As part of the investment, General Catalyst will have the right to nominate one director to Axiom's board of directors, following completion of the separation.The Convertible Preferred Stock pays a dividend of 10.0% per annum in cash prior to the separation, stepping down to 6.0% per annum in cash or 7.0% per annum if paid in kind following the separation, subject to increases after the fifth anniversary of the separation and certain other adjustments.Net proceeds from the investment will be used to fund a portion of the purchase price of Axiom's pending acquisition of EPC Power, to repay any equity bridge or other intermediate financing incurred in connection with the acquisition, to pay dividends on the Convertible Preferred Stock, or for general corporate purposes. Flex separately has secured committed term loan financing for the balance of the EPC Power acquisition.The investment is expected to close following receipt of customary regulatory approvals and satisfaction of other customary closing conditions.Flex previously announced its intention to separate its Cloud and Power Infrastructure segment into an independent, publicly traded company, Axiom, which is expected to be completed in the first quarter of calendar 2027, subject to the satisfaction of customary conditions.AdvisorsPJT Partners is serving as financial advisor, and Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal counsel to Flex.Davis Polk & Wardwell LLP is serving as legal counsel to General Catalyst.

Flex Announces $2.0 Billion Convertible Preferred Investment into Axiom Led by General Catalyst with Koch Equity Development

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