Forgent Power aims to go public by capitalizing on the data center trend

The once sleepy electrical equipment industry is now undergoing a significant transformation, exemplified by Forgent Power Solutions gearing up for an unprecedented $9 billion initial public offering on the New York Stock Exchange come February. The company, specializing in transformers, switchgears, and controls, primarily caters to data center hyperscalers and energy developers who are currently driving high demand. Forgent, which formally introduced itself under this name in August 2025, is the product of a private equity firm’s integration of four distinct equipment manufacturers.

The surge in demand for electrical equipment in the United States has led to shortages, with lead times stretching up to four years due to a lack of capacity among domestic manufacturers and challenges faced by importers with long supply chains abroad. Forgent’s recent submission to the Securities and Exchange Commission (SEC) revealed a backlog of $1 billion in purchase orders, showcasing a staggering 56% revenue growth from fiscal 2024 to 2025. To address this, the company plans to enhance its manufacturing capabilities this year to keep up with demand.

One of Forgent’s key strategies is to mitigate the lengthy wait times experienced by data centers and power developers, achieved by having manufacturing facilities in the U.S. and Mexico. Additionally, their unique pre-assembled “powertrains” come fully equipped with all the essential hardware necessary for artificial intelligence-driven data centers, making them a sought-after solution in the market.

Despite its favorable positioning in the AI data center sector and operational benefits from grid reinforcement efforts and reshoring, analysts from S&P Global have acknowledged Forgent as niche in comparison to its larger, more diversified counterparts. This categorization renders the company more susceptible to economic fluctuations. Factors such as escalating steel, aluminum, or copper prices that cannot be transferred to customers could potentially impact Forgent’s margins.

Forgent’s approach of providing prefabricated systems to reduce field labor aligns with current market trends, especially given the shortage of electricians in the U.S. This “plug and play” concept bears similarity to Shoals Technologies, which streamlined the installation process of utility-scale solar projects by offering a pre-assembled cable system. The success of such innovative solutions is evident in the market’s response to Shoals’ public offering back in 2021.

Anticipating a substantial public fundraising of up to $1.6 billion, Forgent aims to capitalize on its relationships with hyperscalers, which generated 42% of its total revenue in fiscal 2025. The increasing demand for customized electrical infrastructure to cater to evolving requirements highlights the significance of partnerships with entities demanding higher voltages, currents, power densities, and integration of on-site generation and battery storage.

The utility and energy sectors, accounting for 23% of Forgent’s revenue, indicate another area of growth driven by the modernization of grid infrastructure and the rising adoption of on-site solar installations, gas turbines, and battery storage solutions among various companies. These trends reflect the evolving landscape and increasing demand for tailored solutions in the electrical equipment market.