Legrand's Datacenter Play: A Powerhouse in the Digital Transition Surge

The global datacenter market is on fire, driven by AI's insatiable appetite for compute power and the relentless shift to cloud-based services. Nowhere is this clearer than in the “grey space” – the critical power distribution infrastructure that keeps servers humming. Here, Legrand (LR.PA) has quietly positioned itself as a leader through a series of strategic acquisitions, including its recent purchase of Malaysia-based Linkk Busway Systems. This move, along with prior deals like Power Bus Way in North America, isn't just about incremental growth. It's a masterclass in capturing high-margin opportunities in the digital transition era.

text2imgA sleek Legrand power busbar system installed in a datacenter, glowing with energy-efficient lighting and surrounded by server racks/text2img

The Grey Space Gold Rush

Datacenters are the backbone of the digital economy, but their true complexity lies beyond the servers themselves. The “grey space” encompasses power distribution systems, cooling infrastructure, and cabling – all of which Legrand now dominates through its acquisitions. Linkk Busway, with its €45 million in annual revenue, brings expertise in high-capacity power busbars to Legrand's portfolio. These systems are mission-critical: they deliver uninterrupted power to servers while minimizing energy loss, a premium service in an era of soaring electricity costs and sustainability mandates.

But Linkk is just one piece of Legrand's puzzle. The company has also acquired Power Bus Way (€70 million revenue in NA), Davenham (Europe's specialist in modular datacenter solutions), and VASS (Australia's leader in industrial automation). Together, these deals add nearly €410 million in annualized revenue and form a global network of expertise in grey space infrastructure. **visual>Legrand's datacenter revenue growth from 2020 to 2024

Synergies Fueling a 20%+ Datacenter Revenue Engine

Legrand's acquisitions aren't random. They're meticulously chosen to create cross-selling opportunities and reduce costs. For instance, Linkk's busbars can now be bundled with Power Bus Way's North American solutions and VASS's automation tech, offering datacenter operators a one-stop shop for power distribution. This integration has already paid off: datacenter revenue now accounts for 20% of Legrand's proforma sales, up from just 15% in 2022.

CEO Benoît Coquart's vision is clear: “This isn't about selling parts. It's about solving the energy and scalability challenges of the next-generation datacenter.” With AI workloads expected to grow at a 45% CAGR through 2027 (per IDC), Legrand's position in the grey space – where margins often exceed 25% – positions it to capitalize on every watt of this demand.

The 2030 Target: A Roadmap to $15 Billion

Legrand's 2030 goals are ambitious but achievable. The company aims to double its sales to €12–15 billion, with datacenter infrastructure as the primary growth driver. Key levers include:
1. Acquisition Pipeline: With €1.3 billion in free cash flow (2024) and a proven track record of bolt-on deals, Legrand is primed to snap up smaller competitors.
2. Eco-Responsibility: 80% of sales by 2030 will come from eco-responsible products, aligning with corporate sustainability mandates.
3. Geographic Expansion: Linkk's Asian foothold and Power Bus Way's NA presence create a platform to serve hyperscalers like Google and Amazon, which are doubling their datacenter footprints.

Why Investors Should Act Now

Legrand isn't just riding a wave; it's shaping it. With AI's power demands set to outstrip current infrastructure capacity, the grey space will be the battleground for who controls the digital economy. Legrand's integrated solutions – from Malaysia to Toronto – give it a first-mover advantage in a market projected to hit $120 billion by 2030 (Statista).

**visual>Legrand's stock price vs. MSCI Europe Index since 2020
While Legrand's stock has lagged broader European markets in recent quarters, its Q2 2025 results (due July 31) could change that. Analysts expect datacenter sales to hit €2.1 billion in 2025, up 18% year-on-year. With a forward P/E of just 16x (vs. 22x for peers like Siemens), Legrand offers both growth and valuation upside.

The Bottom Line

Legrand's acquisitions are more than strategic moves – they're a blueprint for owning the digital transition. With datacenters consuming 3% of global electricity (and rising), the grey space is where profits will be made. For investors seeking a leveraged play on AI's infrastructure needs, Legrand is a buy at current levels. The quiet period ends July 31; mark your calendars – this could be the catalyst to push shares to their €120 target.

Investors should note that Legrand's July 1–31 quiet period may restrict communication until results are announced.