Data center power equipment provider Forgent(FPS.US) hits NYSE with AI momentum, raises $1.5 billion, valuation reaches $8.2 billion

American power equipment manufacturer Forgent Power Solutions Inc. (FPS.US) and some of its shareholders raised a total of $1.5 billion in its initial public offering, with an offering price set at the midpoint of the previously announced range.

This data center power equipment designer and manufacturer announced on Wednesday that its stock was priced at $27 per share. The company sold 16.6 million shares, while affiliates of major shareholder Neos Partners sold 39.4 million shares, within the previously announced range of $25 to $29 per share. According to sources familiar with the matter, the offering was oversubscribed by double digits.

Based on the number of shares outstanding listed in the prospectus, this pricing values the company, headquartered in Dayton, Minnesota, at approximately $8.2 billion.

Forgent designs, manufactures, and sells equipment such as transformers, distribution panels, and power distribution units for data centers, which require continuous and reliable power supply. Private equity firm Neos founded the company in 2023 and has expanded gradually through acquisitions in 2023 and 2024.

This IPO comes at a time when investors are seeking to participate in the AI spending boom, with OpenAI alone pledging to invest over $1 trillion in AI infrastructure.

Power equipment stocks have surged significantly—nVent Electric soared 86% over the past 12 months, and Vertiv Holdings increased 64%. Forgent CEO Gary Nedprum previously worked at Vertiv.

Morningstar electrical equipment industry analyst Nicholas Lib noted that Forgent’s product line is less broad than Vertiv’s, which is not only an electrical product provider but also a major supplier of NVIDIA chips and other AI infrastructure cooling equipment. This cooling business has contributed to Vertiv’s valuation premium.

Lib also stated that Forgent focuses on customized “on-demand” electrical equipment for the power transmission segment (hardware that delivers electricity from the grid to data centers) and benefits from additional growth driven by grid upgrade demands, which are among its advantages.

“These types of companies are usually highly profitable with long operating histories, and their long-term investment safety mainly comes from relatively slow product iteration,” Lib explained. “But the risk is that if the data center spending ‘feast’ suddenly ends, they will face a huge impact.”

Forgent has manufacturing facilities in Minnesota, Texas, Maryland, California, and Mexico. As of September 30, the company employed approximately 2,000 full-time staff. After the IPO, Neos will continue to hold the majority of voting rights.

According to financial documents, in the three months ending September 30, the company achieved revenue of $283 million and a net profit of $10 million; in the same period last year, revenue was $154 million with a net profit of $6.3 million.

The IPO was jointly led by Goldman Sachs, J.P. Morgan, and Morgan Stanley. The company’s stock is expected to begin trading on the New York Stock Exchange on Thursday under the ticker symbol “FPS.”