Daikin Applied to acquire data center cooling firm DDC Solutions

MINNEAPOLIS - Daikin Applied, a subsidiary of the $36.6 billion market cap industrial giant with a "GOOD" financial health rating according to InvestingPro, announced Tuesday it has entered into a definitive agreement to acquire DDC Solutions, a San Diego-based developer of ultra-high-density cooling cabinets and management software for data centers. InvestingPro analysis indicates the company is currently undervalued, suggesting strong growth potential.

The acquisition, which is subject to regulatory approvals and expected to close by the end of August, will expand Daikin Applied’s data center portfolio by adding in-room, rack-level cooling solutions. The move aligns with the company’s impressive 8.12% revenue growth over the last twelve months, during which it generated $31.7 billion in revenue. InvestingPro subscribers can access detailed analysis of similar strategic acquisitions in the industrial sector.

DDC Solutions offers a patented, self-contained hybrid cooling system that integrates air and liquid cooling directly within data center racks. The company’s S-Series technology supports up to 100 kW air cooling and is designed to handle ultra-high-density cooling requirements.

"The demand for high-performance data centers is accelerating and the equipment inside those data centers is evolving rapidly," said Yu Nishiwaki, Chief Operating Officer for Daikin Applied.

Following the acquisition, DDC Solutions will operate as a subsidiary of Daikin Applied with its current leadership team remaining in place. With a healthy current ratio of 1.85 and substantial EBITDA of $4.3 billion, Daikin Applied demonstrates strong financial positioning for strategic acquisitions like this one.

The deal represents a strategic move for Daikin Applied, which currently provides data center cooling technologies ranging from large-tonnage chillers to in-room air handlers. The addition of DDC’s rack-level solutions will allow the company to offer more comprehensive cooling options for data centers.

Keith Markley, Chief Executive Officer of DDC Solutions, noted that joining Daikin Applied will enhance the company’s ability to meet growing global demand for data center cooling solutions.

Lincoln International served as the exclusive financial advisor to DDC Solutions for the transaction.

This article is based on a press release statement from Daikin Applied.

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