By Laura Sanicola

Forgent Power Solutions gained more than 8% in its first day of trading Wednesday, a notable showing as investors grew more selective about where they place bets related to artificial intelligence.

Forgent, which trades under the ticker FPS on the New York Stock Exchange, priced its initial public offering at $27 a share, the midpoint of its marketed range, raising $1.5 billion. Shares ended the session slightly above $29, valuing the company at roughly $8.8 billion.

Forgent makes equipment that moves electricity from the grid and fuel cells into data centers and industrial facilities. Power equipment sits several layers upstream from chips and servers, but the sustained capital spending associated with AI is positive for companies like Forgent that supply long-cycle projects.

Based in Dayton, Minn., Forgent is a private-equity-backed roll-up assembled by Neos Partners beginning in 2023. The company manufactures transformers, switches, and power-distribution equipment, much of it bundled into prefabricated "powertrains" designed for large, energy-intensive applications.

Data centers now account for roughly more than 40% of its revenue and a significant portion of its approximately $1 billion backlog of orders, according to company filings.

Chief Executive Officer Gary Niederpruem told Barron's that Forgent's competitive advantage lies in customization delivered at speed. More than 90% of the company's products are engineered to order, with designs tailored to specific sites and workloads. By engaging customers early and relying on a vertically integrated manufacturing model, Forgent says it can deliver equipment 30% to 50% faster than many competitors, an important consideration as data-center developers seek to avoid costly construction delays.

"We take raw materials and transform them ourselves, from cutting and welding to painting and final assembly," Niederpruem says. "The supply chain is very simple and local, which gives us a competitive advantage."

Forgent is expanding aggressively to keep up with demand. It is increasing its manufacturing footprint from about 500,000 square feet to roughly 2.3 million square feet with facilities across the U.S. and Mexico.

Forgent competes against much larger electrical-equipment suppliers such as Eaton, ABB, and Schneider Electric, which offer broader product portfolios, global service networks, and decadeslong relationships with Big Tech customers.

As Energy Insider noted earlier this week, it trades at a slightly premium valuation, with shares priced at a mid-30s multiple of enterprise value to trailing earnings before interest, taxes, depreciation, and amortization, or Ebitda. The valuation relative to forecast earnings, which assume quick growth and sustained demand, is closer to levels for its rivals.

Its big exposure to data centers can also cut both ways. Vertiv Holdings, which makes cooling systems and power management for high-density AI workloads, has seen its shares fall more than 8% over the past five days amid a broader technology selloff tied to concerns about stretched valuations and high capital spending from Big Tech. Eaton, whose product base is more diversified and whose data-center exposure is embedded within a broader electrical and industrial portfolio, is up about 1% over the same period.

Financially, Forgent is profitable but still early in its public-market life. The company reported $882 million of revenue in the 12 months ended in September 2025, with sales up 84% in the first quarter of fiscal 2026. Adjusted Ebitda totaled $169 million for fiscal 2025.

None of the IPO proceeds will fund Forgent's operations. Most shares were sold directly by Neos, while proceeds from Forgent's own share sale will be used to redeem the private-equity firm's interests in the operating subsidiary.

-- Avi Salzman contributed to this article.

Write to Laura Sanicola at laura.sanicola@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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February 05, 2026 17:21 ET (22:21 GMT)

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