No qualifying author-owned investment thesis was confirmed in this post.
The author explicitly states they are sharing notes on an upcoming IPO and lists both pros and cons without taking a directional investment position (buy/sell/hold).
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Been digging into this one since the S-1 (link [here](https://www.sec.gov/Archives/edgar/data/2080126/000119312526008865/d890989ds1.htm)) dropped and wanted to share my notes for the upcoming IPO this week.
They make electrical distribution equipment - transformers, switchgear, PDUs, power skids, the stuff that moves electricity from the grid to your servers. Not sexy but completely essential. Every data center, every utility substation, every big manufacturing plant needs this stuff.
FY25 revenue: $753M (up 56% YoY)
Adjusted EBITDA: $169M (22.5% margin)
Adjusted net income: $88.7M
Backlog: $1.03B as of Sept 2025
Q1 FY26 came in at $283M revenue which is 84% growth. The backlog being larger than full year revenue gives decent visibility. One thing I noticed - they lead with adjusted figures everywhere. GAAP net income isn't prominently disclosed which usually means there's a meaningful gap. They're adjusting out amortization from acquisitions, sponsor fees, integration costs, stock comp, etc. The adjustments are defensible given the situation but I'd like to see full GAAP figures.
This is a PE roll-up. Neos Partners bought four separate companies between Oct 2023 and June 2024:
MGM Transformer (Oct 2023)
PwrQ (March 2024)
States Manufacturing (May 2024)
VanTran (June 2024)
So they've been operating as a combined entity for less than two years.
Revenue breakdown:
Data centers: 42%
Grid/utilities: 23%
Industrial: 19%
Other: 16%
By product type:
Custom/engineered-to-order: 91%
Standard products: 5%
Services: 4%
The custom work is where the margins are. They're not competing on price with commodity stuff.
Their CEO is Gary Niederpruem who was at Vertiv before this, their largest comparable and another power infra company. He was part of the leadership team that carved Emerson Network Power out of Emerson Electric and turned it into Vertiv. That's probably the most relevant experience you could ask for - he's literally done this before with a similar business. CFO Ryan Fiedler came from Caterpillar where he was CFO of their Resource Industries segment ($12B+ in revenue). So the management bench is legitimately experienced.
As mentioned above, Vertiv is the big dog in data center power/cooling infrastructure, currently trading around $135 with a $50B+ market cap.
Pros:
* AI buildout, grid modernization, manufacturing reshoring - all of this requires electrical equipment
* Supply constrained market. Lead times for this stuff can be 2-4 years from some suppliers. Forgent claims their lead times are 30-65% shorter than industry average
* Capacity expansion almost done. They've invested $205M to expand manufacturing, should support up to $5B in revenue without major additional capex
* Management knows the space
Cons:
* This is a PE exit. 70% of the IPO is secondary (existing shareholders cashing out). Only 30% is primary shares with proceeds going to the company. Neos wants liquidity.
* Roll-up risk. Four acquisitions in 8 months is aggressive and its unproven as a combined entity. Less than 2 years of operating history together.
* Valuation is rich for what's essentially a bet that the pieces fit together
* Data center exposure cuts both ways. If AI capex slows down they're exposed.