AI growth fuels Eaton acquisition as industrial companies tap into big U.S. data-center buildup

By Steve Gelsi

Eaton's $9.5 billion Boyd Thermal deal follows its purchase of Fibrebond and Resilient Power for more than $1.5 billion, as companies outside the tech sector get involved in AI

Eaton sees an opportunity to take part in a surge of investment in data-center construction.

An earlier version of this article contained an incorrect spelling for Fibrebond Corp. in its sub-headline.

Eaton Corp. is making its third and largest acquisition this year to boost its product offerings in the data-center infrastructure space, which has seen a construction backlog reach nearly half a trillion dollars over the past 12 months.

Eaton (ETN) said Monday its $9.5 billion purchase of the Boyd Thermal unit of Boyd Corp. from seller Goldman Sachs Group Inc.'s (GS) private-equity arm will add a liquid-cooling business to its array of electrical products including backup power, power-distribution units, conduit boxes, fittings and fiber networks.

An Eaton spokesperson declined to comment further on the deal, after MarketWatch reached out to the power-management company about the expected impact of the acquisition on its data-center business.

Eaton has already announced two data-center deals in recent months: the $150 million purchase of Resilient Power on July 16 and the $1.4 billion acquisition of Fibrebond Corp., a designer and builder of modular power enclosures for data centers, in March.

Asked about Eaton's focus on data centers at a Sept. 12 investor conference, CEO Paulo Ruiz said the company sees an opportunity as spending on data-center projects - those currently in construction or those that have been announced - has soared in the past year, to an estimated $470 billion from $150 billion a year ago.

"It's over three times the backlog that the industry had in hand last year - so it's a tremendous tailwind for our business and we are really excited about it," Ruiz said.

In the second quarter, Eaton's data-center business grew 50% and its orders were up 55%, he said.

"So that market is really hot," Ruiz said.

Eaton's stock rose 0.2% in morning trading Monday. It has gained 15.4% in 2025, while the S&P 500 index SPX has advanced 16.6%.

Along with data centers, Eaton said it sees opportunities to support utility companies as well as commercial and defense-related aerospace.

While data centers have been seen as a boost to tech companies in the artificial-intelligence business, the power demand for AI has driven interest in many industrial sectors, including utility companies such as Constellation Energy Corp. (CEG), and even bulldozer maker Caterpillar Inc. (CAT).

Also read: Caterpillar's stock hits a record high on bright outlook for energy and AI data-center development

Wall Street's interest in the arena remains strong, as shown by the success of an initial public offering from Fermi Inc. (FRMI). The power-development company managed to raise $683 million in its IPO even though it has yet to generate any significant revenue.

Boyd Thermal is expected to generate $1.7 billion in sales in 2026. Goldman Sachs Asset Management, which has owned Boyd Thermal since 2018, will retain ownership of Boyd's engineered-materials business as an independent company.

Separately, Eaton is due to report third-quarter results on Tuesday. Based on current analyst estimates compiled by FactSet, the company is expected to report an eighth straight quarter of year-over-year sales declines.

Eaton makes power-management products such as uninterruptible power systems, as well as aerospace products such as aerial-refueling gear.

-Steve Gelsi

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11-03-25 1124ET