Schneider Electric Expands Its Data Center Power Capabilities

Schneider Electric strengthens its data center leadership position by acquiring Motivair Corporation, a major global supplier of advanced liquid cooling solutions.

Schneider Electric, a leader in the digital transformation of energy management and automation, has announced that it has signed an agreement to acquire a controlling stake in Motivair Corporation ("Motivair"), a company specializing in liquid cooling and advanced thermal management solutions for high-performance computing systems. 

The emergence of generative AI and the introduction of large language models (LLMs) have become additional catalysts driving advanced computing capacity requirements to support increasing digitalization in recent markets. 

The accelerated computing transition is driving data center architectures to require more efficient cooling solutions, particularly liquid cooling, since traditional air cooling alone cannot reduce the resulting high heat output. As computing in data centers becomes more densely packed, the need for effective cooling will increase, and numerous market and analyst forecasts project growth of more than 30%^[1] CAGR in liquid cooling solutions over the coming years. This transaction strengthens Schneider Electric's direct-to-chip liquid cooling and high-capacity thermal solutions portfolio, enhancing existing offerings and advancing innovations in cooling technology. 

Motivair, headquartered in Buffalo, New York, was founded in 1988 and currently has more than 150 employees. Leveraging strong engineering capabilities and deep domain expertise, Motivair offers a world-class range of products for thermal management, including chiller units, coolant distribution units (CDUs), rear door heat exchangers (RDHx), cold plates, and heat distribution units (HDUs). Motivair delivers a premium portfolio to customers to address the thermal challenges of modern computing technology. 

While liquid cooling is not a new technology, its application specific to data center and artificial intelligence environments represents a new market poised for strong growth in the coming years. Motivair has unparalleled experience spanning many years in cooling the world's fastest supercomputers with liquid cooling solutions. In recent quarters, the company has been on a strong double-digit growth trajectory that is expected to continue as it delivers end-to-end liquid cooling solutions to many of the largest data center and artificial intelligence customers. 

Peter Herweck, Chief Executive Officer of Schneider Electric, commented: "The acquisition of Motivair represents an important step in advancing our position as a global leader in the data center value chain. Motivair's unique liquid cooling portfolio completes our value proposition in data center cooling and further strengthens our significant position in data center deployments from grid to chip and chip to coolant." 

Rich Whitmore, President and Chief Executive Officer of Motivair Corporation, who will continue to manage Motivair from Buffalo following completion of the acquisition, said, "Schneider Electric shares our core values and commitment to innovation, sustainability and excellence. Combining our strengths with Schneider will enable us to further expand our operations and invest in new technologies that will advance our mission and solidify our position as an industry leader. We are very excited to embark on this exciting journey together." 

Under the terms of the transaction, Schneider Electric will acquire an initial 75% controlling stake in Motivair's equity for a price of USD 850 million, including the value of assumed debt and representing a mid-single digit multiple of Motivair's projected fiscal year 2025 revenue. The transaction is subject to customary closing conditions, including receipt of necessary regulatory approvals, and is expected to close in the coming quarters. Upon completion of the transaction, Motivair will report within Schneider Electric's energy management business segment. The group expects to acquire the remaining 25% non-controlling stake in 2028. 

Schneider Electric's focus on the data centers and networks end market, which represented 21% of FY23 group orders, has been a key growth driver, with data center sales growing at double-digit CAGR since 2017 and expected to continue in the coming years. 9 of the world's 10 largest cloud and service providers rely on Schneider Electric's solutions, and 4 of 6 data center companies rely on its sustainability business consulting and services.