FILE PHOTO: An employee works at a data center in California, U.S., September 5, 2025. REUTERS/Brittany Hosea-Small/File Photo

By Aishwarya Jain

(Reuters) -Eaton will acquire Boyd Corporation's thermal business from Goldman Sachs Asset Management for $9.5 billion, the fourth deal this year for the power management firm seeking to bolster its data center segment to cater to AI demand surge.

The global appetite for energy-intensive data centers has sparked a wave of dealmaking across the industry, as companies race to build capacity to meet the surge in power and cooling needs.

Peer Vertiv also announced its plans to acquire PurgeRite Intermediate for about $1 billion to expand its liquid cooling services portfolio.

What is impressive to us is that Eaton has gone "all-in" in liquid cooling with this chunky deal size, rather than dipping its toe in with a small investment like the other players have done, said Deane Dray, analyst at RBC Capital Markets.

Boyd Thermal forecast sales of $1.7 billion for 2026, a majority of which is expected to come from its liquid cooling technology used at data centers, Eaton said on Monday.

"Our combined expertise in both power and liquid cooling from the chip to the grid will enable customers to manage increasing power demands more effectively," said Eaton CEO Paulo Ruiz.

The company said in August it expects data center and distributed IT equipment to account for the largest share of its sales by the end 2025, at about 17%.

Earlier this year, it bought Fibrebond Corporation, which designs and builds pre-integrated modular power enclosures used at data centers, for $1.4 billion.

In the last few months, it also acquired Resilient Power Systems, which makes transformers with applications in the EV and the data center industry, for an undisclosed amount, and aerospace systems firm Ultra PCS for $1.55 billion.

Eaton said the Boyd acquisition, expected to close in the second quarter of 2026, will boost its adjusted earnings starting in the second year after the deal is completed.

(Reporting by Aishwarya Jain in Bengaluru; Editing by Shinjini Ganguli)