Dell’Oro Group Reports Industrial Realignment Toward Data Center Power and Thermal Capabilities

Industrial firms are concentrating portfolios around AI-linked data center power and thermal needs through divestitures, spin-offs, and targeted acquisitions, aiming for clearer market valuation. The shift matters for enterprise buyers tracking suppliers’ capabilities across grid-to-chip infrastructure.

Portfolio focus and conglomerate discount

The note argues that investors applied a conglomerate discount to broad industrial portfolios, pushing companies toward narrower structures. It cites breakups including GE HealthCare, GE Vernova, and GE Aerospace, plus Honeywell’s separation and United Technologies’ split into Carrier, Otis, and Raytheon.

Carrier is presented as an example of narrowing to climate and energy while exiting other units, using both acquisitions and carve-outs. The article frames the program as “performing while transforming,” tied to signed divestitures within about a year and aggregate deal value over $10 billion.

Carrier shifts toward intelligent climate and energy

The report says Carrier acquired Viessmann Climate Solutions for roughly €12 billion, closing in January 2024. On the divestiture side, it lists sales of Global Access Solutions to Honeywell for an enterprise value of $4.95 billion, around 17x EBITDA.

It also lists Carrier’s sale of Industrial Fire to Sentinel Capital Partners for $1.425 billion, Commercial Refrigeration to Haier for $775 million, and Commercial and Residential Fire to an affiliate of Lone Star Funds for $3 billion. The note adds that Carrier sold Chubb fire and security to APi Group in 2021.

Johnson Controls moves toward building and data center solutions

The article says Johnson Controls completed in August 2025 the sale of its Residential and Light Commercial HVAC business to Bosch for $8.1 billion, including its residential joint venture with Hitachi. It states the move leaves JCI as a pure-play provider of building solutions with around $5 billion in net proceeds and a $5 billion accelerated buyback.

The note describes earlier portfolio actions at JCI, including the Adient spin-off in 2016 and the sale of the lead-acid battery business (Clarios) in 2019. It also cites acquisitions such as Silent-Aire and Alloy Enterprises as steps toward data center exposure.

HVAC and thermal specialists narrow scope

The report describes Modine’s January 2026 agreement to spin off its Performance Technologies business and combine it with Gentherm via a Reverse Morris Trust. It says Performance Technologies has about $1.1 billion in revenue and cites a valuation of roughly $1.0 billion for the transaction, around 6.8x post-synergy EBITDA.

For Munters, the note says its Data Center Technologies unit drives close to 40% of sales. It also states Munters offloaded its FoodTech business plans while building on data center side capacity through the 2024 acquisition of Geoclima.

Electrical side realignment and grid-to-chip plays

The article says Flex announced in May 2026 its intention to spin off its Cloud and Power Infrastructure segment into a new independent company provisionally called SpinCo. It states SpinCo targets 65% to 75% revenue growth for fiscal 2027, accelerating beyond 80% the year after, and that the split is expected to close in early 2027.

It also cites ABB’s planned divestiture of its robotics division to SoftBank for $5.375 billion and nVent’s sale of thermal management to Brookfield for $1.7 billion. The note includes Eaton’s plan to separate Mobility Group and combine it with Dana in a Reverse Morris Trust and describes Eaton’s acquisitions, including Boyd Thermal for $9.5 billion.

Building more of the stack

Vertiv is described as expanding across white space racks, heat rejection, server-side liquid cooling design and validation, and related lifecycle services through multiple acquisitions. The article says this strategy is end-to-end, grid-to-chip and across the lifecycle.

Schneider Electric is described as taking fewer but larger bets, including a €5.5 billion cash buyout of Temasek’s remaining stake in Schneider Electric India and a $850 million acquisition with a 75% controlling stake in Motivair. The note says Motivair brings CDUs, cold plates, rear-door heat exchangers, and chillers.

New entrants add infrastructure capability

The report says Ecolab agreed to acquire CoolIT Systems for $4.75 billion, moving from cooling water for data centers to liquid-cooling for the chip. It also cites other entrants and moves including Samsung’s acquisition of FläktGroup, Trane’s acquisitions of LiquidStack and Stellar Energy, and Daikin Applied’s moves involving Chilldyne and DDC Solutions.

On the electrical side, the note says Legrand ran a series of acquisitions across busbars, racks, and power distribution. It describes these moves as extending beyond traditional infrastructure vendors.

Analyst outlook in the note

The article forecasts more deals above $1 billion, citing expectations for “still more deals” crossing that threshold in the year ahead. It links the deal cycle to data center capex and argues that acquiring technical capability, manufacturing capacity, and customer relationships fits the business case.

The note also states that CEOs are offloading distraction and sharpening focus, framing these actions as a response to the AI buildout. It contrasts the industrials’ approach with the dot-com bubble outcome, asserting that the industrials take a measured approach and are remaking portfolios for the AI-linked market.

This Analyst Signals brief reflects a neutral, fact-based summary of the original research note.