• Blackstone will acquire Flow Control Holdings, a U.S. supplier of engineered liquid cooling components used in data centers and other high-specification industries.
• The deal gives Blackstone greater exposure to rapidly expanding AI infrastructure, where liquid cooling can improve energy efficiency and power usage effectiveness.
• Audax Private Equity will retain a minority stake, while Blackstone plans to support FCH’s manufacturing capacity expansion as demand from hyperscalers grows.

Blackstone Targets AI Cooling Infrastructure

Blackstone has agreed to acquire Flow Control Holdings, expanding its exposure to the infrastructure supporting the global buildout of artificial intelligence.

Private equity funds affiliated with Blackstone Capital Partners and Blackstone Energy Transition Partners will acquire the company from Audax Private Equity. Financial terms were not disclosed.

Audax will retain a minority equity stake and continue working with Blackstone and FCH management following the transaction.

Flow Control Holdings, or FCH, manufactures highly engineered flow control solutions and components. Its products serve data center liquid cooling systems as well as food, beverage and pharmaceutical markets.

The Cincinnati-based company supplies components used by original equipment manufacturers and hyperscale data center operators. Applications include coolant distribution units, in-row manifolds and secondary fluid networks.

Those systems are becoming increasingly important as AI processors generate greater heat loads than traditional computing infrastructure.

Liquid cooling can remove heat more efficiently than conventional air cooling. That can help operators improve power usage effectiveness, reduce energy requirements for cooling and support higher-density computing environments.

AI Demand Drives Investment Case

Blackstone is positioning the acquisition around one of its highest-conviction investment themes: the rapid expansion of infrastructure required to support artificial intelligence.

Bilal Khan, Senior Managing Director, and Mark Zhu, Managing Director, at Blackstone, said: “We believe that FCH has enormous tailwinds for continued growth as the latest generations of high-performance AI infrastructure increasingly rely on liquid cooling technology for significantly improved energy and chip efficiency. FCH has built deep trust with their customers for some of the most demanding workloads across both the data center and food, beverage, and pharmaceutical markets. We look forward to partnering with Scott and the entire FCH management team, as well as Audax, to invest in the company’s capacity expansion plan, support unprecedented liquid cooling demand, and further accelerate growth behind one of Blackstone’s highest-conviction investment themes – the immense buildout of AI infrastructure.”

The transaction also reflects a broader shift in data center investment.

Power availability, grid constraints and rising electricity demand are becoming major strategic issues for hyperscalers. At the same time, increasingly powerful computing systems are forcing operators to reconsider how data centers manage heat.

Cooling infrastructure therefore has implications beyond equipment procurement. It can influence energy efficiency, operating costs, facility density and the amount of computing capacity that can be supported within existing power constraints.

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FCH Expands Through Acquisitions

FCH has invested heavily in the data center cooling market during the past four years.

“We’re thrilled to partner with Blackstone as we enter our next chapter of growth,” added Scott Kerns, Chief Executive Officer of FCH. “Over the past four years, we’ve invested significantly to develop a leading position in the data center cooling market supporting our OEM customers and hyperscalers. Audax has been a tremendous partner supporting FCH through investments in the team, capital for new production and distribution facilities, and the execution of 10 acquisitions to build FCH’s capabilities in the data center cooling, food, beverage and pharma markets.”

Audax’s continued minority ownership gives the existing investor exposure to FCH’s next phase while Blackstone provides additional capital and scale.

“We believe the sale of FCH represents a tremendous outcome for the incredibly dedicated and talented team at FCH as well as our investors,” added Audax Private Equity Partner Don Bramley. “Scott and the entire team have been outstanding partners in building FCH as a leader in the data center cooling market. We view the FCH investment as a text-book example of Audax’s ability to build strategic assets through disciplined execution of the Audax Value AgendaTM and Buy & Build approach. We look forward to partnering with Blackstone and continuing to support FCH in its next chapter of growth.”

Cooling Becomes a Strategic ESG Issue

The transaction is expected to close in the fourth quarter.

For executives and investors, the deal highlights how AI infrastructure is creating new investment opportunities across the data center supply chain. Cooling is moving from an operational consideration to a strategic constraint on computing growth.

That shift also carries ESG implications. More efficient cooling can reduce the energy required to operate increasingly dense computing environments. It may also help data center operators manage emissions as electricity demand from AI continues to rise.

As governments and utilities confront the power demands of digital infrastructure, technologies that improve data center efficiency are likely to attract greater capital. Blackstone’s FCH acquisition places liquid cooling firmly within that investment race.