Flex Agrees to Sell $2.0B of Axiom Preferred at $37.5B Initial EV

Flex said on 5 October 2026 that it has agreed to sell $2.0 billion of Series A Convertible Preferred Stock of Axiom, its Cloud and Power Infrastructure segment, to funds affiliated with General Catalyst, Koch Equity Development and co-investors, at an initial enterprise value for Axiom of $37.5 billion. Flex says it intends to separate Axiom into an independent, publicly traded company in the first quarter of 2027.

This publication read Flex’s release, its Form 8-K and two passages of the certificate of designations filed with the SEC, and verified none of it independently.

What Flex Announced

Flex says it entered into an agreement to sell $2.0 billion of Series A Convertible Preferred Stock of Axiom Solutions International, Inc. to funds affiliated with General Catalyst, Koch Equity Development and co-investors. It says that, pro forma for the separation, the investment will be solely in Axiom.

Chief executive Revathi Advaithi, who is also expected to be Axiom’s chief executive, is quoted in the release: “This investment provides equity funding for our recently announced acquisition of EPC Power.” The release says General Catalyst will have the right to nominate one director to Axiom’s board after the separation is completed.

The Terms in the Filing

Flex’s Form 8-K says the agreement was entered into on 2 October 2026 by Flex, Axiom, GC Venture XIII (ASI), L.P. (“General Catalyst”) and other investors. It says the investors agreed to buy 200,000 shares of Axiom’s Series A Convertible Preferred Stock at $10,000 a share, an aggregate purchase price of $2,000,000,000, in a private placement.

The release says the preferred stock pays a dividend of 10.0% a year in cash before the separation, stepping down to 6.0% a year in cash, or 7.0% a year if paid in kind, after the separation, subject to increases after the fifth anniversary and certain other adjustments.

In the certificate of designations filed with the SEC, the conversion price is defined, before a “Reset Date”, as the lower of a price that would imply an enterprise value of $37.5 billion and 120% of an “Initial Reference Price”. A further provision adjusts the price upward if it would imply an enterprise value below $30.0 billion. This publication read only those passages.

If the Separation Does Not Happen

The 8-K says Flex guarantees Axiom’s obligation to redeem all outstanding preferred shares if the separation is not completed on or before 31 December 2027. The redemption price is 115% of the purchase price if paid in cash, or 125% if paid in Flex ordinary shares, in each case minus cash dividends already paid, with an adjustment so that the investors’ after-tax amount is preserved at an assumed 25.5% tax rate.

The 8-K says any unpaid portion of the redemption price bears interest at 12% a year. This publication’s own arithmetic on the stated figures: 115% of $10,000 is $11,500 a share and 125% is $12,500, which is $2.3 billion and $2.5 billion across 200,000 shares, before the subtractions the filing describes and before the tax adjustment it describes, which increases the amounts.

What the Money Is For

The release says net proceeds will fund a portion of the purchase price of Axiom’s pending acquisition of EPC Power, repay any equity bridge or other intermediate financing incurred for it, pay dividends on the preferred stock, or serve general corporate purposes. It says Flex has separately secured committed term loan financing for the balance of the EPC Power purchase price.

The 8-K says a Flex subsidiary entered into the EPC Power stock purchase agreement on 3 September 2026, with Flex guaranteeing its obligations, and that the acquisition is expected to close in the fourth quarter of 2026. It says closing of the preferred investment is subject to customary conditions, including expiry of the Hart-Scott-Rodino waiting period and other required regulatory approvals.

The Structural Read

The release leads with the valuation and the use of the money: $2.0 billion at an initial enterprise value of $37.5 billion, funding part of the EPC Power purchase, and it sets a 10.0% cash dividend before the separation. The 8-K adds the share count and price, 200,000 shares at $10,000, and a redemption if the separation is not completed by 31 December 2027.

Two things sit behind the headline number. In the conversion-price passages this publication read, the price is tied to the $37.5 billion implied enterprise value, as the lower of that and 120% of an initial reference price, with a floor at $30.0 billion. And Flex, not only Axiom, guarantees the redemption, payable at Axiom’s election in cash or in Flex shares, an election the 8-K says is subject to Flex’s approval.

The money is tied to one acquisition. The release says the proceeds fund part of the EPC Power purchase price, repay any bridge financing, pay dividends or serve general corporate purposes, while a separate committed term loan covers the balance. The release says the investment is expected to close following receipt of customary regulatory approvals and satisfaction of other customary closing conditions.

Three Implications

THE STARTING VALUE Flex calls the $37.5 billion an initial enterprise value. In the passages this publication read, it is a reference point for the conversion price, with a floor at $30.0 billion; the release this publication read gives no value for Axiom at any later date.

A DATE IN THE TERMS The filing puts a date on the separation: if it is not completed by 31 December 2027, the redemption terms apply, at 115% in cash or 125% in Flex shares before the subtractions described. According to the 8-K, that obligation is guaranteed by Flex.

WHAT REMAINS UNKNOWN The release and 8-K this publication read give no amount for each investor, no figures for Axiom’s revenue or earnings and no conversion mechanics beyond the passages read. They describe a transaction that has not closed.

What Is Not Established

The release and 8-K this publication read give no amount for each investor, including Koch Equity Development, and no revenue or earnings for Axiom. This publication did not read the certificate of designations or the investment agreement in full, did not read General Catalyst’s or Koch’s own statements and did not seek a response from any party.

Everything above is Flex’s own account of a transaction that has not closed, and the separation is subject to conditions Flex lists.

The Bottom Line

Flex says it has agreed to sell $2.0 billion of Axiom Series A Convertible Preferred Stock at an initial enterprise value of $37.5 billion, with 10.0% cash dividends before the separation and a Flex-guaranteed redemption, at 115% in cash or 125% in shares before subtracting cash dividends already paid and subject to a tax adjustment, if the separation is not completed by the end of 2027. It says the proceeds help fund the EPC Power acquisition. This publication verified none of it independently.