Hubbell to Acquire DMC Power for $825 million.

Hubbell Incorporated has entered into a definitive agreement to acquire DMC Power, LLC for $825 million in cash. The acquisition enhances Hubbell's Utility Solutions portfolio with complementary technology and is expected to be financed with cash and debt. The deal is anticipated to be accretive to adjusted EPS in 2026, driven by growth in load growth, datacenter interconnection, and aging infrastructure.

Title: Hubbell Incorporated Acquires DMC Power for $825 Million

Hubbell Incorporated (NYSE: HUBB) has announced a definitive agreement to acquire DMC Power, LLC for $825 million in cash. The acquisition aims to strengthen Hubbell's Utility Solutions portfolio by incorporating complementary technology and expanding its market presence. The transaction is expected to close by the end of 2025 and will be financed through a combination of cash reserves and new debt.

DMC Power, currently owned by Golden Gate Capital, specializes in connector technology systems for high voltage power infrastructure. The company operates manufacturing facilities in Carson, CA, and Olive Branch, MS, and anticipates 2026 revenue of $130 million and EBITDA of $60 million. The acquisition values DMC at approximately 6.3x its projected 2026 revenue and 13.8x EBITDA, reflecting its attractive 46% EBITDA margin profile.

The strategic rationale behind the acquisition centers on technological complementarity rather than cost synergies. DMC Power's swage connection technology, which creates permanent electrical connections through mechanical compression, fills a critical technology gap in Hubbell's existing transmission and substation connector portfolio. This technology is particularly valuable as it addresses three converging infrastructure megatrends: increasing electrical load growth, accelerating datacenter construction, and aging grid infrastructure replacement.

Hubbell's $825 million acquisition of DMC Power represents a strategic expansion into high-growth transmission and substation markets. The acquisition is anticipated to be accretive to adjusted EPS in 2026, driven by the financial benefits of the transaction outweighing integration costs and additional interest expense. The expected EPS accretion suggests that Hubbell anticipates the transaction's financial benefits to outweigh integration costs relatively quickly.

The timing of the acquisition aligns with accelerating utility capital investment cycles driven by electrification, renewable integration, and AI infrastructure buildout. This provides Hubbell with enhanced exposure to these secular growth trends through DMC's specialized connector solutions.

Hubbell Incorporated, with 2024 revenues of $5.6 billion, projects that DMC's $130 million contribution will represent only ~2.3% of consolidated revenue but will deliver higher profitability. The expected EPS accretion in 2026 suggests that Hubbell anticipates the transaction's financial benefits to outweigh integration costs and additional interest expense relatively quickly.

The acquisition is subject to customary closing conditions, including regulatory approvals. Advisors Stephens Inc. is serving as the financial advisor to Hubbell, and Holland & Knight LLP is serving as the legal advisor. Harris Williams and Lincoln International are serving as the financial advisor to Golden Gate Capital, and Paul, Weiss, Rifkind, Wharton & Garrison LLP is serving as the legal advisor.

References:
[1] https://www.stocktitan.net/news/HUBB/hubbell-to-acquire-dmc-lqnpclhtar2b.html