SLB expands its data center business by $3.4 billion with Kelvion

SLB announced on Monday that it would acquire cooling equipment manufacturer?Kelvion, from Apollo Global & funds managed by Triton, for $3.4 Billion in cash. This will expand its data center?business due to the rapid adoption of AI.

Under the agreement, the world's largest oilfield service company will assume approximately $700 million in Kelvion's liabilities. The deal is expected to be completed?inthe first half of 2027.

SLB stated that the acquisition would 'expand their data center business, and the range of equipment they can supply to customers. They will also more than double the revenue opportunities per gigawatt delivered capacity by adding Kelvion’s thermal management technology.

SLB said that Kelvion's combined data center solutions business will generate revenues of $4.5 to $5 billion, and earnings adjusted before interest, tax, depreciation, and amortization between $700 and $800 million by 2028. SLB reported that Kelvion's fastest-growing market is data centers.

Oilfield Services in the U.S. is adopting more digital technologies for managing increasing volumes of geological and production data, as well as infrastructure and infrastructure data. This sector aims to reduce costs, increase reliability, and reduce emissions.

Kelvion's?majority is owned by Apollo-managed fund, while funds advised Triton own a minority stake in the cooling equipment manufacturer.

SLB, on the other hand, has partnered with Liberty Energy for modular parts and power in data centers. They have also teamed up with Nvidia NVIDIA?to?create a?platform to...help energy companies apply AI across vast troves and operational data.

SLB shares grew 2% in the premarket trading.

(source: Reuters)