Sanmina Agrees To Acquire ZT Systems' Data Center Infrastructure Manufacturing Business From AMD

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(RTTNews) - Manufacturing solutions company Sanmina Corp. (SANM) announced Monday it has agreed to acquire the data center infrastructure manufacturing business of ZT Systems, a leading provider of Cloud and AI infrastructure to the world's largest hyperscalers, from AMD Corp. (AMD) for $3 billion.

The consideration includes $2.25 in cash for assets at target net asset value, $300 million premium consisting of 50% cash / 50% equity and a $450 million contingent consideration based on financial performance of the business over the next three years.

Sanmina said the acquisition establishes its position as an industry-leading, vertically integrated global manufacturing solutions provider that can now also accelerate its customers' at scale deployments of cutting-edge AI systems for the data center.

ZT Systems' current annual net revenue run-rate is approximately $5 billion to $6 billion and the outlook ahead is promising as new accelerated compute platforms are launched.

The company's advanced liquid cooling capabilities and manufacturing facilities in New Jersey, Texas and the Netherlands, together with its global supply chain, position it to offer end-to-end systems integration, from components to complete racks, for the Cloud and AI infrastructure ecosystem.

AMD will retain ZT Systems' AI systems design businesses and will work with Sanmina as a U.S.-based new product introduction (NPI) manufacturing partner of choice to accelerate quality and time-to-deployment of AMD AI rack and cluster-scale systems for cloud customers.

The acquisition of ZT Systems' manufacturing business is expected to be accretive to Sanmina's non-GAAP EPS in the first year after closing, with further EPS accretion expected as synergies are fully realized over time.

The combination is expected to generate synergies, driven primarily by operational efficiencies due to scale and vertical integration.

The Sanmina equity issued to AMD will be subject to a lock-up period of 3 years, which begins at the time of closing, during which equity sales are limited to 33% in the first year, 33% in the second year, and the remaining equity in the third year.

In connection with the transaction, Sanmina has obtained committed financing from Bank of America for $2.5 billion.

This transaction has been unanimously approved by the Sanmina Board of Directors. It is expected to close near the end of the 2025 calendar year, subject to regulatory approvals and customary closing conditions.