Forgent Power raises $1.5B in IPO as data center energy demand surges
Electrical equipment maker prices at $27 per share, valuing company at nearly $9 billion
Forgent Power Solutions raised $1.5 billion in an initial public offering that priced at the midpoint of its targeted range, underscoring investor enthusiasm for companies supplying critical infrastructure to the booming artificial intelligence data center market.
The electrical equipment manufacturer priced its IPO at $27 per share on Tuesday, with 56 million shares offered. The stock will begin trading on the New York Stock Exchange under the ticker symbol "FPS" on February 5, 2026, valuing the company at nearly $9 billion.
Goldman Sachs, Morgan Stanley and Jefferies led the underwriting syndicate, with J.P. Morgan, BofA Securities and Barclays also serving as bookrunners. The elite lineup of Wall Street banks suggests strong institutional appetite for exposure to the energy infrastructure supporting AI data centers.
Forgent, formed by a private equity firm through the integration of four separate electrical equipment makers, manufactures transformers, switchgears and controls. The company's revenue surged 56% between fiscal 2024 and 2025, reaching $1 billion in backlog orders.
Data centers now account for approximately 42% of Forgent's total revenue, driven by AI facilities requiring specialized electrical infrastructure capable of handling higher voltages, increasing currents and greater power densities. Utilities and energy developers contribute another 23% of revenue.
The company differentiates itself by offering pre-assembled "powertrains"—customized electrical packages that allow data centers to connect to power grids with minimal field labor. With US electrician shortages contributing to lead times of up to four years for some electrical equipment, Forgent's US and Mexico-based factories position it to bypass complex overseas supply chains.
"The electrical equipment industry is experiencing a surge in demand, leading to short supply," according to the company's prospectus analysis. This scarcity is driving consolidation opportunities and pricing power for manufacturers with domestic production capacity.
Analysts note that while Forgent benefits from the data center construction boom, it remains a niche player compared to diversified giants like Schneider Electric and Eaton. The company's narrower focus could make it more vulnerable to economic volatility but also provides higher growth potential in specialized segments.
Of the 56 million shares offered, Forgent is selling 16.6 million shares while existing stockholders are offering 39.4 million shares. The company will use its proceeds to redeem interests in an operating subsidiary.
The successful pricing of Forgent's IPO reflects broader investor confidence in the power solutions sector, which has emerged as a critical bottleneck in AI infrastructure expansion. With grid modernization efforts accelerating and data center power consumption projected to grow exponentially, electrical equipment manufacturers are positioning themselves as essential enablers of the AI revolution.