3rd Mar 2026 08:37
(Alliance News) - Smiths Group PLC on Tuesday said it has agreed to buy a US provider of heating and cooling systems for data centres, a growing market due to spending on artificial intelligence computing.
The London-based engineering company said the acquisition, DRC Heat Transfer, will be folded into subsidiary Flex-Tek's industrial heat business. Chicago-based DRC was founded in 1970 and employs more than 250 people.
Smiths Group said the GBP164 million purchase price represents a 10-times multiple of DRC's adjusted earnings in 2025, when DRC generated GBP73 million in revenue.
"This acquisition marks further progress on our strategy as we scale Flex-Tek's industrial heat business into higher growth end markets," Smiths Group Chief Executive Officer Roland Carter said.
"With strong exposure to the growing data centre market and with wider power generation capabilities, this acquisition not only broadens our capabilities for existing customers but increases the addressable market for Flex-Tek into fast growing adjacencies."
Completion of the acquisition is expected in the second half of financial 2026, Smiths Group said. The company's financial year ends on July 31.
The purchase follows the company sale last month of its Smiths Detection division to CVC Capital Partners PLC at an enterprise value of GBP2.0 billion.
Smiths Group shares were down 1.0% to 2,678.00 pence early Tuesday in London. The stock is up 32% over the past 12 months, giving the FTSE 100 constituent a market capitalisation of GBP8.41 billion.
By Tom Waite, Alliance News editor
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