Baird's Perspectives on the Electrical Power Solutions Market (Baird)

Summary

• Baird's LTM Electrical Power Solutions M&A metrics show ~$11 billion total transaction value across 9 transactions, with ~$1.4 billion average transaction value and ~17x average EV/EBITDA.p.3
• Global M&A activity hit a record $1.6 trillion in Q1 2026, the strongest start to a year on record.p.19
• Ecolab's $4.75 billion acquisition of CoolIT was struck at 29x NTM EBITDA.p.19
• Hyperscaler AI infrastructure capex is set to reach ~$620B in 2026 (+50% YoY).p.9
• Data center stocks achieved a 644% five-year return, outperforming the broader industrials market.p.15
• Data center companies trade at a 14.2x multiple premium to the industrial market, versus 3.9x for Electrical / Grid and 8.3x for Services.p.14

Key insights

1. U.S. electric utility capex is set to total $1.4T over 2025–2030, double the prior decade, as utilities respond to AI-driven load growth.p.9
2. U.S. data center electricity consumption is set to roughly double by 2030, from ~4% to ~8% of total U.S. electricity.p.9
3. The DOE made $1.9B available in Mar-26 for transmission reconductoring and grid-enhancing technologies.p.8
4. Projected total U.S. data center capex is expected to reach ~$1 trillion in 2026, +52% from three years ago.p.6
5. GE Vernova has grown its backlog from $116 billion at its spin to $163 billion.p.13
6. AI is now projected to consume ~3.5% of global electricity by 2030.p.19
7. Grid investment is projected at $470B+ annually worldwide, supporting long-term growth for the Electrical / Grid peer group.p.14