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Jabil acquires Mikros Technologies to boost AI infrastructure

Published 10/03/2024, 07:05 AM
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ST. PETERSBURG, Fla. - Jabil Inc. (NYSE: JBL), a company recognized for its comprehensive design, manufacturing, and supply chain solutions, announced the acquisition of Mikros Technologies LLC, a company specializing in liquid cooling solutions for thermal management. The acquisition, completed on October 1, aims to enhance Jabil's data center solutions and address the thermal management needs in sectors such as AI, energy storage, and electric vehicles.

Mikros Technologies, with over three decades of expertise, brings to Jabil proprietary microchannel liquid cooling technologies that boast the ability to cool over one kilowatt per square centimeter. This capability is particularly crucial as industries increasingly adopt high-power density systems that require more efficient cooling methods than traditional air cooling.

Ed Bailey, Senior Vice President and Chief Technology Officer at Jabil, expressed enthusiasm about the acquisition, noting that Mikros Technologies' thermal management capabilities will allow Jabil to expand its service offerings. Bailey highlighted the potential for growth in various markets, including data centers, semiconductor testing, and the burgeoning fields of energy storage and electric vehicles.

Drew Matter, CEO of Mikros Technologies, also commented on the acquisition, stating that joining forces with Jabil represents a significant step forward for his company, enabling them to scale their liquid cooling solutions to meet the demands of leading global brands.

This strategic move is expected to provide Jabil with critical capabilities to support customers in managing the intense thermal requirements of current and future products, with an emphasis on sustainability and cost-effectiveness.

The acquisition is part of Jabil's ongoing commitment to delivering scalable and customized solutions across various industries, leveraging its global reach and local expertise. The information is based on a press release statement from Jabil Inc.

In other recent news, Jabil Inc. reported robust financial results for the fourth quarter and fiscal year 2024, with Q4 revenues touching $7 billion. The company also completed a $2.5 billion share repurchase program and announced a new $1 billion buyback plan for fiscal year 2025. Looking ahead, Jabil projects Q1 FY '25 revenues to be between $6.3 billion and $6.9 billion, with core earnings per share estimated at $1.65 to $2.05. The full-year forecast anticipates $27 billion in revenue and core earnings per share of $8.65.

In terms of strategic developments, Jabil has undergone a reorganization into three segments: Regulated Industries, Intelligent Infrastructure, and Connected Living & Digital Commerce. This move is intended to enhance focus and growth potential. The company has also divested its Mobility business for $2.2 billion, returning much of the proceeds to shareholders.

These recent developments highlight Jabil's commitment to its growth strategy and returning value to shareholders. The company's strategic investments in healthcare, automotive, and data centers are driving growth, while new facilities in the Dominican Republic and Croatia will support medical device production. Despite challenges in the automotive sector and ongoing pricing pressure in cloud and data center sectors, Jabil remains optimistic about its future growth.

InvestingPro Insights

Jabil Inc.'s acquisition of Mikros Technologies aligns well with its strategic positioning in the Electronic Equipment, Instruments & Components industry. According to InvestingPro data, Jabil boasts a market capitalization of $13.5 billion, reflecting its significant presence in the sector.

The company's financial health appears robust, with a P/E ratio of 10.53, suggesting that it may be undervalued relative to its earnings. This is further supported by an InvestingPro Tip indicating that Jabil is trading at a low P/E ratio relative to its near-term earnings growth. This valuation metric could be particularly attractive to investors considering the potential growth opportunities presented by the Mikros Technologies acquisition.

Despite a revenue decline of 16.77% in the last twelve months, Jabil maintains a strong operating income margin of 4.98%. This operational efficiency may be crucial as the company integrates Mikros Technologies and expands into new markets such as AI and electric vehicles.

An InvestingPro Tip highlights that management has been aggressively buying back shares, which often signals confidence in the company's future prospects. This, coupled with Jabil's 19-year track record of maintaining dividend payments, suggests a commitment to shareholder value that may be appealing to long-term investors.

For readers interested in a deeper analysis, InvestingPro offers 13 additional tips that could provide further insights into Jabil's financial position and growth potential.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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