Flex Ltd. announced the executive roster for both the parent company and its pending cloud and power infrastructure spinoff, the final pre-close milestone before separating roughly $3.2 billion in annual revenue into a standalone entity. The appointments require Board ratification and completion of the transaction, expected to close in the second half of 2025. The move separates Flex's hyperscale datacenter and power infrastructure business from its automotive, industrial, and consumer electronics operations.
The parent company will retain Revathi Advaithi as CEO, focusing on automotive electrification and industrial manufacturing contracts. The spinoff entity—unnamed in the announcement—will house datacenter cooling systems, power distribution units, and rack-level infrastructure sold to AWS, Microsoft, and Google Cloud. Flex generated $26.3 billion in total revenue for fiscal 2024, with the cloud segment contributing approximately 12% of that figure. The separation aims to unlock a pure-play valuation multiple for datacenter hardware, which trades at 18-22x forward EBITDA compared to Flex's blended 8.5x.
The leadership slate signals Flex's intent to position the spinoff for immediate M&A or partnership activity. Naming executives before the deal closes reduces post-separation integration risk and accelerates the new entity's ability to negotiate supply agreements with hyperscalers. Flex's cloud business competes directly with Vertiv and Schneider Electric in the datacenter infrastructure space, where $54 billion in global capex is expected in 2025 as AI training clusters demand higher power density. The parent company's automotive exposure remains concentrated in EV battery management systems and advanced driver-assistance hardware, markets growing at 14% annually but facing margin compression from Chinese suppliers.
Allocators should track three events. First, the spinoff's final name and ticker assignment, expected within 90 days of the Board's approval. Second, the new entity's first customer contract announcements, which will reveal whether it retains all three hyperscaler relationships or loses one to vertical integration. Third, the parent company's automotive order book in the Q3 2025 earnings call, which will show whether BMW and Stellantis renew multi-year supply contracts or shift to lower-cost Asian manufacturers.
The separation completes 18 months after Flex first disclosed the review. The new entity enters a market where datacenter infrastructure suppliers are consolidating—Vertiv acquired E&I Engineering for $1.9 billion in 2023—and hyperscalers are building their own cooling systems to reduce dependency on third-party vendors.