Eaton Corporation's $9.5bn Acquisition of Boyd Thermal
- Jan 26
- 6 min read
By Utku Kaya, Omar Kanaa, Nayoung and Harvey Han (King's College University), Alvaro Aguilar De Nalda (ESADE); Charlie Mercuri, Daniel Blitenthall, Charlie Mercuri and Aikie Davoren (Melbourne University)
Photo: Alexandre Debiève (Unsplash)
Overview of the deal
Acquirer: Eaton Corporation
Target: Boyd Thermal (Thermal business of Boyd Corporation)
Implied Equity Value: $9.5 billion
Total Transaction Size: $9.5 billion
Closing Date: 2Q 2026 (Estimated)
Target Advisor: Goldman Sachs & Co. LLC, J.P. Morgan Securities (financial); Davis Polk & Wardwell LLP (legal)
Acquirer Advisor: N/A
Eaton has agreed to acquire Boyd Thermal for USD 9.5 billion to expand its position in data-centre infrastructure and meet growing demand driven by AI workloads. The acquisition adds a full portfolio of liquid-cooling and thermal-management technologies, which complement Eaton’s existing “chip-to-grid” power-management products. Boyd Thermal is forecast to generate USD 1.7 billion of sales in 2026, with most revenue coming from liquid cooling. This segment is expected to grow significantly as data centres shift from traditional air cooling to more advanced solutions, rising from less than 10% adoption today to more than 25% by 2028.
The deal strengthens Eaton’s ability to offer integrated power and cooling systems across data-centre, industrial and aerospace end-markets. It also positions Eaton ahead of competitors that have only recently begun investing in liquid-cooling capabilities. The purchase price represents 22.5x Boyd Thermal’s expected 2026 EBITDA, reflecting strong growth expectations despite initially lower margins. Eaton expects the transaction to be accretive to adjusted earnings in its second year after closing. The deal is subject to regulatory approvals and is expected to complete in the second quarter of 2026.
“This is a transformative day for the entire Boyd team, and I am confident that combining Eaton’s chip-to-grid power and Boyd’s Chip-to-Ambient™ cooling architectures will help accelerate the deployment of future AI datacenters.” - Doug Britt, Chief Executive Officer (Boyd Thermal)
Company Details (Acquirer - Eaton Corporation)
Eaton Corporation plc (NYSE: ETN) is a global power management company, operating across a diverse range of markets, including data center, utility, industrial, commercial, machine building, residential, aerospace, and mobility sectors. Leveraging on the reindustrialization trend and the surge of megaprojects across data center, utility, commercial aerospace and defense sectors in North America, Eaton captures strong demand throughout the entire electrical power value chain. Eaton Corporation maintains strategic partnership with industry-leading companies across key sectors including, data centers (Amazon, Microsoft), Aerospace OEMs (Boeing) and automotive OEMs (General Motors, Ford).
Founded in 1911, headquartered in Dublin Ireland
CEO: Craig Arnold
Number of Employees (FY24)*: 94,000
Market Cap*: $131.15bn (as of 12/6/2025)
Enterprise Value (EV)*: $141.89bn
LTM Revenue*: $26.63bn
LTM EBITDA*: $6.12bn
LTM EV/Revenue*: 5.33x
LTM EV/EBITDA*: 24.20x
Recent Transactions: Private Placement in Xendee Corporation (September 2025), Acquisition of Resilient Power Systems (August 2025), Acquisition of Ultra PCS Limited (Jun 2025)
*As of 12/6/2025
Company Details (Target - Boyd Thermal)
Boyd Thermal, a division of Boyd Corporation owned by Goldman Sachs Asset Management (GSAM) prior to the deal, is a leader in advanced thermal management solutions. Leveraging a manufacturing footprint across North America, Asia, and Europe, it provides customers with end-to-end solutions. From component design and validation, to manufacturing and system deployment, Boyd thermal serves customers across the data centre, aerospace, and industrial markets. The division’s core value proposition has evolved with the artificial intelligence (AI) boom, specializing in proprietary, highly engineered liquid cooling systems, such as its ‘Chip-to-Ambient’ cooling architectures. Boyd Thermal has strategically positioned itself within this context, recently entering a collaboration with NVIDIA and its liquid cooling segment is now expected to drive $1.5 billion of the division’s $1.7 billion forecasted sales for 2026.
Boyd’s engineered materials business will continue to be under the ownership of GSAM after completion of the deal, allowing a clean separation of Boyd Corporation’s distinct business lines.
Founded: 1928 (Boyd Corporation)/2017 (Thermal Division)
Headquartered: Pleasanton, California, USA
CEO: Doug Britt (Boyd Corporation)/ David Huang (President of Global Thermal Division)
Number of employees: ~5,000
Market Cap*: N/A
EV*: $9.5 billion USD
LTM Revenue*: N/A
LTM EBITDA: N/A
LTM EV/Revenue: N/A
LTM EV/EBITDA: N/A
Recent Transactions: Acquisition of Thermamasters (January 2021); Acquisition of Lytron (July 2019); Acquisition of Aavid Thermalloy (May 2017)
*As of 18/11/2025
Projections and Assumptions
Short-Term Consequences
With the deal announced in early November 2025, yet expected to close in Q2 2026, the short-term impact on earnings will primarily have a muted effect: with the 2025 financials not being affected and only a partial contribution to the 2026 results. Eaton has provided no pro-forma EPS guidance, but stated the acquisition is expected to become accretive to adjusted earnings in the second year after closing, signalling that any uplift will emerge from 2027 onward rather than in the near term. The premium paid price of 22.5x Boyd Thermal’s estimated 2026 adjusted EBITDA support the idea that initial earnings dilution or neutrality is plausible until growth and synergies are given the time to materialise.
This transaction will significantly expand Eaton’s product suite upon closing, gaining capabilities in advanced liquid-cooling, two-phase cooling and thermal-interface technologies that are critical for AI data-centre infrastructure, high-power electronics and EV platforms. Boyd Thermal is forecast to generate $1.7 billion of revenue in 2026, including $1.5 billion from liquid cooling, positioning it as a high-growth addition to Eaton’s electrical segment. The acquisition reinforces Eaton’s strong manufacturing presence across North America and Europe while deepening its operations in Asia. Through Boyd Thermal’s facilities in China and Vietnam, it strengthens its proximity to semiconductor, data-centre and electrification customers.
Market reaction was cautiously negative with Eaton’s shares falling ~1.8% in pre-market trading on the announcement and weakened further following softer Q3 earnings. This could reflect investor concern around the transaction’s premium valuation despite strong strategic alignment.
Long-Term Upsides
By acquiring Boyd Thermal, Eaton can offer customers a complete infrastructure package that covers both power and cooling, from the semiconductor and server level all the way to the data hall, electrical distribution, and the grid. This positions Eaton as a global solutions provider rather than just a components supplier, offering a more comprehensive service to their clients. It allows Eaton to capture a larger share of each project, and potentially expand into large-scale contracts offering end-to-end, “chip-to-grid” solutions.
Boyd’s advanced liquid-cooling and thermal technologies significantly expand Eaton’s ability to serve the rapidly growing data-centre industry, which Goldman Sachs estimates will grow by 165% between 2023 and 2030, heavily dependent on rising power demands of AI infrastructure. Since hyperscale and AI centers are increasingly requiring liquid cooling to operate efficiently, the acquisition links Eaton’s long-term growth to structural AI and hyperscale demand rather than cyclical industrial spending. This enhances Eaton’s relevance in high-performance computer infrastructure, and positions them as a key player in facilitating the AI revolution.
Eaton gains diversification of its product offering by expanding into thermal-management and advanced cooling solutions, a higher-margin segment due to its technical complexity, and significant customer dependence, unlocking pricing power. This allows Eaton to capture a larger share of high-value infrastructure spend while still leveraging its core power-management capabilities, reducing risk through product diversification.
Risks and Uncertainties
Whilst the deal is strategically compelling, there are a number of industry and company specific risks for this transaction. Eaton is paying a relatively high multiple, implying that much of the value is heavily reliant on optimistic growth and future performance.
The transaction remains subject to competition and foreign investment approvals across multiple jurisdictions, given Boyd’s manufacturing footprint in North America, Europe, and Asia.
There also lies risk tied to Boyd’s bet on AI data centres. Data centres have faced increasing energy volatility, with global grids unable to meet power demands. Countries like Ireland and the Netherlands have already imposed restrictions on new data-centre construction. If data centre growth stagnates, Boyd loses its adjacent value proposition.
Similarly, Boyd’s cooling methods use massive amounts of water, which could trigger regulatory and reputational pressures as the added stress puts local water security at risk. These risks grow with every additional centre, suggesting that there is a definitive cap on growth, as resource constraints purely cannot sustain it with our current technology.
There also lies a technology and efficiency breakthrough risk. As the data-center space evolves rapidly, Eaton could expect that new cooling technologies emerge, forcing them to invest heavily in R&D to stay ahead, or else eroding long-term value.
“Bringing together Boyd Thermal’s highly engineered liquid cooling technology and global service model with Eaton’s existing products and scale will provide enhanced value to customers. In data centers particularly, our combined expertise in both power and liquid cooling from the chip to the grid will enable customers to manage increasing power demands more effectively.” - Paulo Ruiz, Chief Executive Officer (Eaton)