Dycom Completes $1.95B Power Solutions Acquisition
The deal significantly expands Dycom's services for the high-growth data center market and is expected to be immediately accretive to earnings.
Dycom Industries (NYSE: DY) has finalized its acquisition of Power Solutions for approximately $1.95 billion, a strategic move positioning the infrastructure provider to capitalize on the booming construction of data centers.
The deal, which consists of $1.63 billion in cash and roughly one million shares of Dycom common stock, was announced as complete on Tuesday. Company leadership stated the acquisition will be immediately accretive to its adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) margin and adjusted diluted earnings per share, while also enhancing free cash flow.
This acquisition marks a significant pivot for Dycom, a company primarily known for providing installation and maintenance services for telecommunications providers. With Power Solutions, Dycom gains a strong foothold in the mission-critical electrical infrastructure required by the hyperscale data centers that power AI and cloud computing. The global data center construction market is projected to reach over $280 billion in 2025, making it a lucrative expansion area.
"The addition of Power Solutions is a landmark event for Dycom," said Dycom's CEO in a statement. "Their expertise in power infrastructure is crucial for the data center market, and this acquisition accelerates our growth in serving this high-demand sector."
Dycom's strategic focus on high-growth areas has already yielded impressive results. The company's stock has nearly doubled in 2025, significantly outperforming the broader S&P 500. It reported contract revenues of $4.7 billion for fiscal year 2025, a 12.6% increase, and a record backlog of $8.2 billion as of October 2025, fueled by nationwide fiber deployment and 5G rollouts.
Shares of Dycom traded up modestly on the news, closing at $348.95. The company, with a market capitalization of nearly $10 billion, has seen its stock trade in a wide range over the past year, from a low of $131.37 to a high of $366.65. The acquisition is expected to be well-received by investors, given the strategic alignment with secular growth trends in digitalization.
Analysts have a strong 'Buy' consensus on the stock, with an average price target of $385.56, suggesting further upside. The move is seen as both offensive—capturing new revenue streams—and defensive, diversifying Dycom's business beyond its traditional telecom customers.
With the integration of Power Solutions, which will retain its existing management team, Dycom is poised to offer a more comprehensive suite of services for the construction and maintenance of digital infrastructure. The company's addressable market for outside-plant data center network services is estimated to exceed $20 billion over the next five years, and this acquisition ensures Dycom is well-equipped to capture a larger share of that expanding market.