Hubbell B Acquires DMC Power for $825M, Expected to Boost Utility Solutions Portfolio.

Hubbell B (HUBB) is acquiring DMC Power for $825 million in cash, expected to close by the end of 2025. The acquisition enhances Hubbell's Utility Solutions portfolio and is anticipated to be accretive to its adjusted EPS in 2026. Hubbell B's strong financial performance and growth prospects in key sectors support a robust stock score, but high valuation and raw material cost challenges are key risks.

Hubbell Incorporated (NYSE: HUBB), a leading manufacturer of utility and electrical solutions, has announced a definitive agreement to acquire DMC Power, LLC for $825 million in cash. The acquisition is expected to close by the end of 2025 [1].

DMC Power, currently owned by Golden Gate Capital, specializes in connector technology systems for high voltage power infrastructure and operates manufacturing facilities in Carson, CA and Olive Branch, MS. The acquisition strengthens Hubbell's Utility Solutions portfolio, targeting growth in utility substation and transmission markets [1].

The transaction is valued at approximately 6.3x DMC Power's projected 2026 revenue of $130 million and 13.8x its EBITDA of $60 million, reflecting a premium multiple due to DMC's attractive 46% EBITDA margin profile [1]. Hubbell expects the acquisition to be accretive to its adjusted EPS in 2026, suggesting the company anticipates the financial benefits to outweigh integration costs and additional interest expense relatively quickly [1].

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 [1]. This acquisition will deepen and broaden Hubbell's technology offering with its core customers, enabling fast, reliable buildout of substation infrastructure and datacenter interconnections [1].

The timing of this acquisition aligns with accelerating utility capital investment cycles driven by electrification, renewable integration, and AI infrastructure buildout, providing Hubbell with enhanced exposure to these secular growth trends through DMC's specialized connector solutions [1].

Hubbell's strong financial performance and growth prospects in key sectors support a robust stock score. However, high valuation and raw material cost challenges remain key risks. With 2024 revenues of $5.6 billion, DMC's $130 million contribution represents only ~2.3% of consolidated revenue but delivers higher profitability [1].

The transaction is anticipated to be financed through existing cash reserves and new debt. Hubbell expects the acquisition to be accretive to adjusted EPS in 2026, suggesting the company anticipates the financial benefits to outweigh integration costs and additional interest expense relatively quickly [1].

References:
[1] Hubbell to Acquire DMC Power for $825 Million in Cash. (2025, August 12). Retrieved from https://www.stocktitan.net/news/HUBB/hubbell-to-acquire-dmc-lqnpclhtar2b.html