IES Holdings disclosed plans to acquire DBM Global for $650 million in what becomes the largest transaction in the company's forty-year history. The all-cash deal, announced during a quarterly investor briefing, positions IES as the primary electrical contractor for data center shell construction at a moment when Amazon, Microsoft, and Meta are each running twelve-month build cycles that historically took thirty-six.
The company reported data center revenue grew 41% sequentially in the December quarter, now representing $890 million in trailing twelve-month billings. Operating margin in the infrastructure segment expanded 220 basis points to 8.7%, driven by fixed-price contracts signed eighteen months ago when labor costs were 18% lower. Management guided fiscal 2025 revenue to a range of $3.8 billion to $4.1 billion, a $400 million increase at the midpoint from prior expectations. DBM Global, based in Phoenix, holds $1.2 billion in backlog across seventeen active hyperscale projects in Virginia, Ohio, and Texas.
The acquisition solves two problems simultaneously. First, it doubles IES's available electrician count from 4,200 to 8,600 at a time when every general contractor in the Southwest is trying to staff the same five data center campuses. Second, it locks in relationships with three of the four largest cloud infrastructure buyers before those buyers finish their 2026 site selection. DBM holds master service agreements with two unnamed hyperscalers that auto-renew unless terminated with 180 days notice, effectively securing $2.3 billion in visible work through mid-2027. IES CEO Jeffrey Gendell noted the company turned down $600 million in bid requests in the past six months due to labor constraints—revenue it now expects to capture.
The deal arrives as Infineon and other chipmakers move upstream into power management, a signal that data center construction is shifting from concrete and steel to thermal and electrical systems. IES derives 62% of gross profit from electrical and communications work, not general contracting, which means the company benefits as rack density climbs from 15 kilowatts per rack to 80 kilowatts in AI-training clusters. Each additional kilowatt requires $1,200 in electrical infrastructure, and the average data center project IES is bidding now spec's 50% more power than equivalent facilities built in 2022.
The transaction closes in April, financed through a combination of $400 million in term debt and $250 million drawn from IES's existing revolver. Pro forma leverage sits at 1.8x EBITDA, manageable given the contracted backlog. Watch for DBM's employee retention rates sixty days post-close, particularly among project managers with hyperscaler clearances, and for any margin compression as IES absorbs DBM's lower-margin legacy work. The company will report integration progress on its May earnings call, with visibility into whether the combined backlog can sustain mid-teens revenue growth through fiscal 2027.
IES shares closed at $287, up 9% on the day, valuing the company at 22x forward earnings—a multiple that assumes data center construction spend holds at $50 billion annually rather than the $73 billion hyperscalers have already committed for 2025.
The takeaway
IES locks $2.3B visible backlog and doubles electrician capacity with DBM buy as AI clusters triple power requirements.
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