By Lina Irawan 
At the forefront of this silent revolution is Forgent Power Solutions, a company strategically assembled from four venerable legacy firms by private equity. Branded less than a year ago, Forgent has quickly demonstrated its market relevance and investor appeal, achieving a successful initial public offering (IPO) in February and rapidly ascending to a market capitalization of nearly $8 billion. This rapid ascent underscores a significant shift in investor perception, recognizing the critical role these foundational industries play in the modern digital economy.
Gary Niederpruem, CEO of Forgent Power Solutions, candidly captured the industry’s newfound allure in a recent interview with Fortune, quipping, “I made a joke in one of the investor sessions that we’re bringing sexy back in the electrical distribution space.” This sentiment, while lighthearted, reflects a profound reality: the once-staid electrical equipment sector is now a hotbed of innovation and investment, driven by megatrends that are reshaping global infrastructure.
Forgent strategically serves three core end markets: data centers, power grids, and industrial applications. According to Niederpruem, all three segments are experiencing robust expansion, but the data center segment stands out as the fastest-growing. This acceleration is not merely a continuation of past trends; it represents a dramatic escalation. For the past two decades, cloud computing has been a primary driver of data center growth, a trend that continues to be a significant tailwind. However, the advent of generative AI and large language models has introduced an entirely new dimension of demand. “The AI piece has come on relatively recently, and it’s just icing on the cake. There’s no doubt AI has added an accelerant,” Niederpruem explained. This "accelerant" is evident in Forgent’s financial performance, with its order backlog experiencing a staggering 45% increase near the end of 2025, signaling sustained high demand.
The global AI race demands unprecedented computational power, translating directly into an exponential increase in energy consumption. Modern AI data centers, particularly those housing advanced GPUs like Nvidia’s H100s or upcoming Blackwell platforms, consume orders of magnitude more power per rack than traditional cloud infrastructure. Training a single large language model can require gigawatt-hours of electricity, equivalent to the annual consumption of tens of thousands of homes. This voracious appetite for power necessitates not just more electricity generation, but also sophisticated and resilient electrical distribution equipment to deliver that power from the grid to the thousands of servers within a data center campus. Analysts from the International Energy Agency (IEA) predict that global data center electricity consumption could double by 2026 compared to 2022 levels, primarily driven by AI. This massive growth creates a critical bottleneck for Big Tech giants like Microsoft, Google, Amazon, and Meta, who are collectively investing hundreds of billions into AI infrastructure. These companies cannot build data centers fast enough, and the availability of reliable, high-capacity electrical distribution equipment is a key enabler—or potential constraint—for their expansion plans.
Forgent operates in a competitive landscape dominated by much larger, more established players with broader industry offerings. Giants like Vertiv (where Niederpruem previously held a leadership role), Eaton Corp., Schneider Electric, and GE Vernova boast market caps ranging from Vertiv’s impressive $88 billion (up nearly 1,000% since its 2020 IPO) to GE Vernova’s $217 billion. These industry stalwarts have deep pockets, extensive R&D capabilities, and global footprints.
To carve out its niche and compete effectively, Forgent has strategically focused on bespoke offerings across its four core product families: transformers, switchgear equipment, transfer switches, and prefabricated solutions. This specialization allows Forgent to provide highly customized solutions that meet the exact, often complex, specifications of its clients. Transformers, for instance, are crucial for stepping up or stepping down voltage to appropriate levels for grid connection or internal data center distribution. Switchgear protects and controls electrical circuits, while transfer switches ensure uninterrupted power supply, a non-negotiable requirement for critical infrastructure like data centers. Prefabricated solutions, a growing trend, offer pre-assembled power modules that significantly reduce installation time and complexity on-site, a major advantage in a fast-paced construction environment.
Forgent’s competitive edge also lies in its ability to engage early in the planning process with customers. By collaborating from the initial design phases, Forgent can optimize solutions, identify potential challenges, and ensure seamless integration. This consultative approach, combined with a commitment to speed and scale in delivery, positions the company as a responsive partner capable of meeting detailed specifications for a diverse range of projects. These range from behind-the-meter gas-fired power plants, which provide localized power generation, to massive utility-scale solar farms requiring robust interconnection equipment. The ability to deliver tailored solutions rapidly is paramount in an era where construction timelines for data centers are measured in months, not years, and any delay can translate into significant financial losses for hyperscalers.
Forgent’s origin story is a testament to astute timing and strategic consolidation. In 2022, Peter Jonna, a former Oaktree Capital Management executive, founded Neos Partners with a clear private equity investment thesis: capitalize on the accelerating trends in utilities and electrification. This vision proved prescient, aligning perfectly with the burgeoning AI infrastructure boom. Over a swift two-year period, Neos executed a strategic roll-up, acquiring four established companies: 50-year-old MGM Transformers from California, States Manufacturing from Minnesota, PwrQ from Maryland, and Texas-based VanTran Transformers. These acquisitions brought together decades of expertise, diverse product lines, and established customer bases, forming the foundational pillars of what would become Forgent.
The consolidation was followed by aggressive investment in integration and expansion. Neos injected $205 million to construct 1.8 million square feet of new, state-of-the-art manufacturing space nationwide, including a significant facility near its Dayton, Minnesota headquarters. This expansion dramatically increased the company’s total manufacturing footprint to 2.3 million square feet, providing the scale necessary to meet the escalating demand. Niederpruem, a seasoned industry veteran, joined as CEO over a year ago, tasked with unifying these disparate entities and steering the newly formed company towards its public debut. After a quiet period, the "Forgent" brand name was officially launched in August, intentionally chosen to convey the company’s forward momentum and partnership with its customers – "forging ahead."
Niederpruem openly acknowledged that the IPO route was identified as the optimal exit strategy "pretty early on." He elaborated, “Because of the rate at which we were growing, we knew we were going to have some size and scale that really lent itself best to the public equity markets.” This decision proved sagacious, tapping into investor appetite for critical infrastructure plays and companies positioned to benefit from the AI revolution.
Niederpruem’s extensive career provided him with invaluable experience for this undertaking. He spent three decades at Emerson Electric and its subsidiaries, including Emerson Network Power, which was eventually divested and rebranded as Vertiv. He remained with Vertiv for five years post-acquisition, playing a pivotal role in taking the company public in 2020. This hands-on experience in spinning out a business and navigating the complexities of an IPO prepared him uniquely for the Forgent roadshow and the rigorous process of going public. Following his tenure at Vertiv, he served as CEO of the energy conservation firm Cenergistic before accepting the leadership role at Forgent. "When Neos called with this opportunity, I knew this was right in my wheelhouse and that this is in my blood and in my DNA," he stated, emphasizing his deep connection to the industry.
Now, with the IPO successfully behind them, Niederpruem’s primary focus is on sustaining and accelerating business growth. He expressed strong confidence in the company’s trajectory: “All of our [segments] are growing at tremendous rates. We think the math behind each one of those is not only robust, but very durable.” The durability stems from the fundamental nature of the demand drivers: the continuous need for power to fuel digital transformation, the ongoing modernization and decarbonization of global power grids, and the resurgence of industrial manufacturing and automation.
Looking ahead, the electrical distribution equipment sector faces both opportunities and challenges. The push for sustainability means companies like Forgent must also innovate in energy efficiency, supporting the integration of renewable energy sources and helping data centers reduce their environmental footprint. Supply chain resilience remains a critical concern, but Forgent’s significant investment in expanding its domestic manufacturing capabilities positions it favorably to mitigate disruptions and control quality. Furthermore, the industry will need to attract and develop skilled talent—electrical engineers, manufacturing technicians, and project managers—to meet the escalating demand for sophisticated power solutions. Forgent Power Solutions, born from strategic foresight and propelled by the AI boom, stands as a compelling example of how foundational industries, often operating outside the immediate public gaze, are becoming central to the world’s technological future, forging ahead to power the next generation of innovation.