General Catalyst and Koch Put $2 Billion Into Flex’s Data Center Power Spin-Off at a $37.5 Billion Value

Flex Ltd. filed a Form 8-K on October 5, 2026 reporting an earliest event date of October 2. Under Item 1.01, the filing says Flex, its wholly owned subsidiary Axiom Solutions International, Inc., a Texas corporation, a General Catalyst fund named GC Venture XIII (ASI), L.P., and other investors signed a Series A Convertible Preferred Stock Investment Agreement on October 2. The investors agreed to buy 200,000 shares of Axiom convertible preferred stock at $10,000 a share, for $2.0 billion in total, in a private placement. Closing is subject to the Hart-Scott-Rodino waiting period, another required regulatory approval and customary conditions. Item 1.01 names only the General Catalyst fund and “other investors.” The press release attached as Exhibit 99.1, datelined Austin on October 5, says the buyers are funds affiliated with General Catalyst, Koch Equity Development and co-investors. Axiom is the name for Flex’s Cloud and Power Infrastructure segment, which Flex says it intends to separate into an independent public company in the first quarter of calendar 2027. The 8-K says Axiom filed its Form 10 registration statement on September 15.

The release says the investment is at an initial enterprise value for Axiom of $37.5 billion. The filed agreement is more specific: the conversion price is the lower of a price that implies a $37.5 billion enterprise value and 120 percent of Axiom’s average share price over the 30 trading days after the spin-off, with a second test six months later. So $37.5 billion works as a ceiling on the conversion valuation, not a floor. The preferred pays a 10.0 percent annual cash dividend before the separation, which computes to $200 million a year on $2.0 billion. After the separation the rate is 6.0 percent in cash or 7.0 percent paid in kind, and it rises after the fifth anniversary. If the spin-off is not completed on or before December 31, 2027, Axiom must redeem the stock at 115 percent of the purchase price in cash or 125 percent in Flex shares, less cash dividends already paid, and Flex guarantees that obligation. Those percentages compute to $2.3 billion and $2.5 billion before the deduction. The release says net proceeds will fund part of the pending EPC Power purchase, repay any bridge financing, pay dividends on the preferred, or go to general corporate purposes, and that Flex has separately secured committed term loan financing for the balance. PSV covered the $4.4 billion EPC Power agreement on September 5. Against that price, $2.0 billion computes to about 45 percent. General Catalyst will have the right to nominate one Axiom director after the separation.

The investment agreement defines the business being separated, and the list reads like the equipment schedule of a data center. It has two parts. The cloud solutions business covers liquid cooling, including Flex’s JetCool business and third-party sourced liquid cooling, advanced thermal solutions, data center IT hardware systems and rack-scale integration. The power infrastructure business covers critical power, where the agreement names Anord Mardix, Crown Technical Systems, Electrical Power Products and, once that purchase closes, EPC Power, and embedded power, meaning power modules and custom power solutions. An owner or developer does not buy from “Flex” in the abstract. The purchase order, the deposit, the warranty and the service agreement each sit with a specific legal entity, and every entity on that list is scheduled to move under a new public parent within about six months.

The terms also show how much of this depends on the calendar. Axiom pays 10.0 percent in cash on $2.0 billion until it separates, and Flex owes a premium if the separation slips past the end of 2027. That gives both companies a strong reason to finish the spin-off on schedule. It also means a vendor that takes customer deposits for long-lead equipment is carrying a new fixed cash cost while it closes a $4.4 billion acquisition and stands up as a public company. None of that is a statement about Axiom’s ability to perform. PSV has no information on its backlog, its deposits or its delivery record, and the release describes the investment as giving Axiom a strong balance sheet, which is a company statement. The plain point for real estate is that equipment delivery decides when a powered shell can be turned over, and the supplier’s corporate timeline now belongs in the same schedule review as the utility’s.

On September 5 this desk described a supply chain register: one row per asset per critical system, naming the manufacturer and the contract counterparty. This filing adds a second sheet to it, about the vendor’s corporate status. The inputs are public and specific. The Form 8-K and its exhibits give the parties, the dollar amounts, the closing conditions and the dates. The Axiom Form 10 on EDGAR describes the business being separated and will be amended before the spin-off. Your own files hold the purchase orders, deposit receipts, warranties and service agreements. The output is one row per open order or active contract: the legal entity that signed it; whether that entity is inside the separated business as the agreement defines it; the deposit paid and what secures it; whether a Flex parent guarantee exists and whether it survives the separation; the assignment and change of control language; the promised delivery date; and the filing and page each fact came from.

The reviewer is the development or construction lead for open orders and the asset manager for operating contracts. Counsel reads any assignment, guarantee or change of control clause, because that is a legal interpretation. The approval gate is that no deposit is released, no order is re-papered to a new entity and no consent to assignment is signed until a named person has approved the row. An assistant can do the volume work: pull the filings, extract the dates and conditions, match vendor names in the agreement’s business definition against names in a folder of contracts, and flag every contract that is silent on assignment. It should not decide whether a guarantee survives, should not treat a release’s description of a balance sheet as a credit opinion, and should not infer delivery risk from a financing term. PSV ran no model and tested no product for this brief, and promises no cost, schedule or performance outcome.