Advent to buy majority stake in data center equipment maker LayerZero

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(Reuters) -Private equity firm Advent International said on Monday it has agreed to acquire a majority stake in LayerZero Power Systems, which manufactures power infrastructure equipment for data centers.

The majority stake in the Aurora, Ohio-based company is valued at about $1 billion, a source familiar with the matter told Reuters.

A surge in use of artificial intelligence services such as ChatGPT is driving demand for data centers, and with it, investment in power infrastructure as companies race to expand energy capacity.

LayerZero’s products include power distribution units, remote power panels and static transfer switches, which ensure the safe and reliable distribution of electricity for facilities such as data centers.

“As data centers evolve to support the growing needs of AI and high-performance computing, our role has become even more important,” LayerZero co-founder Milind Bhanoo said.

After the deal closes, LayerZero’s founders, Bhanoo and James Galm, will remain minority equity holders in the company.

Advent will support LayerZero in scaling up manufacturing capacity, expanding its customer base and growing service capabilities.

Annette Clayton, an operating partner at Advent and former CEO of Schneider Electric North America, will serve as LayerZero Chair after the deal closes.

Private equity deal-making is rebounding after a pause induced by tariffs and global uncertainty, driven by renewed buying appetite and improving confidence in the market’s trajectory.

Earlier this month, Advent International announced a 4.4 billion pound ($6.03 billion) takeover of Spectris, a London-listed precision instruments maker.

($1 = 0.7302 pounds)

(Reporting by Harshita Mary Varghese in Bengaluru and Milana Vinn in New York; Editing by Leroy Leo)