Reuters: IPOX® Associate Lukas Muehlbauer comments on Forgent Power’s AI-Driven IPO Valuation
A recent Reuters article reports that electrical equipment maker Forgent Power has announced plans for its U.S. IPO, targeting a valuation of up to $8.83 billion. The company, which is set to list on the NYSE under the ticker "FPS," aims to raise approximately $1.62 billion. The offering is viewed as a key test of investor appetite for infrastructure companies supporting the artificial intelligence and data center boom, specifically distinguishing itself from broader conglomerates.
IPOX® Associate Lukas Muehlbauer provided expert analysis on the listing, highlighting the company's unique revenue mix. He noted that Forgent's 42% revenue concentration in AI data centers represents a rare level of focus in public markets, offering investors a "direct play" on AI spending. However, Muehlbauer also provided context on the valuation, noting that investors will need to weigh the growth potential against the premium price point.
"At a price-to-sales ratio of 10x, Forgent is asking a premium over peers... investors must decide if its high revenue growth justifies the higher price despite thinner profit margins."
Read the full article by Prakhar Srivastava on Reuters: Forgent Power targets $8.8 billion valuation in US IPO
