Forgent Power Solutions Inc. (FPS.US), a U.S. power equipment manufacturer, along with certain shareholders, raised a total of $1.5 billion in its initial public offering, pricing shares at the midpoint of its marketed range. The designer and manufacturer of data center power equipment announced on Wednesday that its shares were priced at $27 per share. The company sold 16.6 million shares, while entities affiliated with major shareholder Neos Partners sold 39.4 million shares. The offering price range had been set between $25 and $29 per share. According to informed sources, the offering was oversubscribed by a double-digit margin.
Based on the number of shares outstanding detailed in the prospectus, this pricing gives the Dayton, Minnesota-based company a market valuation of approximately $8.2 billion. Forgent designs, manufactures, and sells equipment such as transformers, switchboards, and power distribution units for data centers, which require continuous and reliable electricity supply.
The private equity firm Neos established the company in 2023 and expanded it through acquisitions in 2023 and 2024. The listing comes as investors seek exposure to the artificial intelligence spending surge, with OpenAI alone pledging to invest over one trillion dollars in AI infrastructure. Stocks of power equipment companies have already seen significant gains—nVent Electric surged 86% over the past 12 months, and Vertiv Holdings climbed 64%. Forgent's Chief Executive Officer, Gary Niedepruem, previously held a position at Vertiv.
Nicholas Lieb, a Morningstar analyst covering the electrical equipment industry, noted that Forgent's product portfolio is not as broad as that of Vertiv, which is not only an electrical products supplier but also a major provider of cooling systems for Nvidia chips and other AI infrastructure—a business that commands a valuation premium. Lieb also stated that Forgent's strengths lie in its focus on customized, "engineered-to-order" electrical equipment for the power transmission segment—the hardware that delivers electricity from the grid to data centers—and it benefits from additional growth drivers stemming from grid upgrade demands.
"These types of businesses typically have strong profitability and long operating histories; the safety of long-term investment primarily stems from the relatively slow pace of product iteration," Lieb analyzed. "However, the risk is that they would face significant impact if data center spending were to abruptly halt."
Forgent operates manufacturing facilities in Minnesota, Texas, Maryland, California, and Mexico. As of September 30, the company had approximately 2,000 full-time employees. Following the IPO completion, Neos will retain majority voting control. According to financial documents, for the three months ended September 30, the company reported revenue of $283 million and net income of $10 million; during the same period last year, revenue was $154 million with net income of $6.3 million.
The IPO was jointly led by Goldman Sachs Group, Jefferies Financial Group, and Morgan Stanley. The company's shares are expected to begin trading on the New York Stock Exchange on Thursday under the ticker symbol "FPS."