Flex Subsidiary Secures $2 Billion Preferred Investment Ahead of Planned Spin-Off

Executive Summary

On October 2, 2026, Flex Ltd. enters into a material definitive agreement via its wholly owned subsidiary, Axiom Solutions International, Inc. ("Axiom"), to execute a $2.0 billion private placement of Series A Convertible Preferred Stock to an investor consortium led by General Catalyst (GC Venture XIII (ASI), L.P.). This transaction aligns directly with Flex's strategic initiative to separate its Cloud and Power Infrastructure business into an independent publicly traded entity planned for the first quarter of 2027.

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Key Transaction Terms

• Securities Issued: 200,000 shares of Axiom Series A Convertible Preferred Stock, par value $0.0001 per share.
• Purchase Price: $10,000 per share (Stated Value), representing $2,000,000,000 in aggregate gross proceeds.
• Conversion Feature: Convertible into Axiom Common Stock pursuant to terms set forth in the Certificate of Designations.
• Parent Guarantee & Failed Spin-Off Redemption:
  • Flex Ltd. is guaranteeing Axiom's obligations under the agreement.
  • If the planned spin-off of Axiom is not completed on or before December 31, 2027, Axiom is required to redeem all outstanding preferred shares.
  • Redemption Price:
    • Cash: 115% of the Per Share Purchase Price, less cash dividends received.
    • Flex Ordinary Shares: 125% of the Per Share Purchase Price, less cash dividends received.
    • Both options include a tax gross-up mechanism applying an assumed tax rate of 25.5% on gains over the Stated Value.
    • Delinquent amounts accrue interest at 12% per annum until fully settled.

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Strategic Context & Pre-Spin Integration

1. EPC Power Acquisition Financing: On September 3, 2026, Flex entered into an agreement to acquire Delaware-based EPC Power Corp. That acquisition is anticipated to close in Q4 2026, subsequent to which EPC Power will be integrated into Axiom prior to the Q1 2027 spin-off.
2. Form 10 Status: Axiom filed an initial Form 10 registration statement with the SEC on September 15, 2026, establishing the corporate structure for the public separation.
3. Conditions to Closing: Closing of the Preferred Investment is subject to customary regulatory conditions, notably clearance under the Hart-Scott-Rodino (HSR) Antitrust Improvements Act.

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Market and Trading Implications

• Capital Validation: The injection of $2.0B from institutional growth capital confirms substantial private market valuation support for Flex's Cloud and Power Infrastructure segment.
• Downside Protection & Share Overhang Risk: The 125% equity redemption option in the event of a failed or delayed spin-off introduces potential dilution to Flex shareholders if the separation meets insurmountable regulatory or operational hurdles prior to December 31, 2027.
• Execution Milestones: Near-term catalysts include HSR antitrust clearance, closing of the EPC Power transaction in Q4 2026, and shareholder proxy distribution for the Axiom spin-off vote.