$2 Billion Investment Paves the Way for Axiom Spin-Off from Flex in 2027
Key Facts
Flex is moving to spin off its cloud infrastructure and energy unit as a standalone company called Axiom Solutions International, after announcing an agreement to sell $2.0 billion of convertible preferred stock in the planned company. Flex set Axiom’s initial enterprise value at $37.5 billion, according to its announcement on October 5, 2026. The deal adds funding to the spin-off plan the company announced in September, when it unveiled the Axiom name and filed an initial Form 10 registration statement with the U.S. Securities and Exchange Commission. Flex is scheduled to present details of the two companies’ strategies at its innovation day in Austin on November 10, 2026. The spin-off is expected to be completed in the first quarter of 2027, subject to the stated conditions.
The terms of the preferred stock provide for an annual cash return of 10.0% before the spin-off, falling to 6.0% in cash afterward, or 7.0% if paid in kind. This means the return terms vary depending on the stage of the spin-off and the method of payment afterward. The deal comes as Flex prepares to separate its cloud infrastructure and energy business from its other operations. The company previously announced that Axiom would be the trade name of the planned standalone company. The timing of the spin-off remains subject to completion of the required approvals and procedures.
The stated conditions for the spin-off include approval by Flex’s board of directors, the effectiveness of the Form 10, shareholder approval, and approval by the Supreme Court of Singapore. The target date in the first quarter of 2027 therefore remains conditional on meeting those requirements, according to the company. Flex filed the initial form in September as part of the regulatory steps related to creating the standalone entity. The funding announcement follows that filing, with Axiom assigned an initial enterprise value of $37.5 billion. The company says details of the strategies for both Flex and Axiom will be presented at the upcoming innovation day.
Results for the first quarter of fiscal 2027 provide an earlier baseline for Flex’s business ahead of the second-quarter figures cited in the draft. Sales in the first quarter were $7.9 billion, up 21% year over year, according to the company’s quarterly results page. Operating margin under generally accepted accounting principles was 4.9%, while adjusted margin was 6.7%. The company’s previous guidance for fiscal 2027 ranged from $32.3 billion to $33.8 billion in sales. The guidance included adjusted operating margin of between 7.0% and 7.1%, and adjusted earnings per share of between $4.21 and $4.51.