Sanmina has announced a major acquisition that will significantly strengthen its presence in cloud and AI manufacturing. The company will purchase the data center infrastructure manufacturing business of ZT Systems from AMD in a deal valued at up to $3 billion. This bold move positions Sanmina at the heart of rapid advancements in cloud infrastructure and artificial intelligence.
Sanmina’s Strategic Move: Transforming Cloud and AI Manufacturing
Sanmina’s acquisition of ZT Systems’ manufacturing business marks a key transformation. By integrating ZT Systems’ advanced liquid cooling capabilities and state-of-the-art facilities in New Jersey, Texas, and the Netherlands, Sanmina strengthens its ability to support at-scale deployments for cloud and AI infrastructure. This strategic partnership with AMD also creates a preferred relationship for new product introduction (NPI) manufacturing, further accelerating time-to-market for AMD’s AI rack and cluster-scale systems.
Key Benefits and Synergies from the ZT Systems Acquisition
This acquisition delivers a range of immediate benefits to Sanmina, including:
- Doubling revenue scale within three years, driven by expanded reach in the high-growth cloud and AI end-market.
- Broader exposure to existing and new hyperscaler customers, offering a more comprehensive, integrated solution.
- Significant enhancement of manufacturing expertise, including advanced liquid cooling and systems integration.
- Expanded presence in both the U.S. and Europe, strengthening Sanmina’s global footprint.
- Immediate and long-term earnings growth, with the deal expected to be accretive to non-GAAP EPS in the first post-close year.
Financial Details, Closing Timeline, and Industry Outlook
The deal is valued at $2.55 billion in cash and equity, with up to $450 million available as contingent consideration. Bank of America has provided $2.5 billion in committed financing to support the transaction. The acquisition is anticipated to close near the end of 2025, pending regulatory approval. When complete, Sanmina expects to capitalize on the growing demand for digital infrastructure, providing end-to-end solutions across the entire product lifecycle, including design, engineering, manufacturing, and fulfillment.
In summary, the Sanmina ZT Systems acquisition is a game-changing deal that will reshape the company’s position in the cloud and AI ecosystem. With expanded capabilities, deepened customer relationships, and strong revenue prospects, Sanmina is set to deliver sustainable growth and value in the fast-evolving tech landscape.
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