Smiths Group plc has agreed to acquire 100% of DRC Heat Transfer to expend Smiths' cooling and thermal management capabilities within the fast-growing data center market. The transaction is expected to close in the second half of fiscal year 2026, subject to customary regulatory approvals. Upon completion, DRC will be integrated into the industrial heat business of Smiths’ Flex-Tek division. While Flex-Tek already maintains a strong position in industrial heating, DRC’s expertise in cooling applications for back-up power generators provides a highly additive technological bridge. This move allows Smiths to capitalize on the structural growth of data centers, driven by AI and cloud computing demands, which require increasingly sophisticated power security solutions. The acquisition also strengthens Flex-Tek’s geographic and operational footprint in the United States, utilizing DRC’s Chicago-based manufacturing hub and specialized workforce to serve a wider global customer group.

DRC HEAT TRANSFER, which reported an EBITDA margin of LOGIN in 2025, is valued in this transaction at an EV/EBITDA multiple of LOGIN, representing a level LOGIN the 10.3x average currently observed in the Industry & Manufacturing sector.

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