Sign in Subscribe
Western Hemisphere

Blackstone to Acquire Flow Control Holdings as AI Drives Liquid Cooling Demand

The Editor

The Editor

— 3 min read
Share
Flow Control Holdings CEO Scott Kerns
Flow Control Holdings CEO Scott Kerns

Blackstone agreed to acquire Flow Control Holdings, a Cincinnati-based manufacturer of engineered components used in liquid cooling systems for data centers, from Audax Private Equity. The transaction will be made through funds affiliated with Blackstone Capital Partners and Blackstone Energy Transition Partners, while Audax will retain a minority stake. Financial terms were not disclosed, and the deal is expected to close in the fourth quarter of 2026.  

Led by CEO Scott Kerns, Flow Control Holdings supplies components used in coolant distribution units, in-row manifolds and secondary fluid networks for hyperscalers and equipment manufacturers. Under Audax, which invested in the company in 2022, FCH completed 10 acquisitions and expanded its production and distribution capacity, building a larger presence in data center cooling alongside its food, beverage and pharmaceutical businesses.  

Market Context

AI infrastructure is pushing server power density higher, making traditional air cooling increasingly difficult for high-performance systems. Nvidia says hyperscale facilities can now support more than 135 kilowatts per rack, compared with roughly 20 kilowatts historically, increasing the need for liquid-based cooling. Reuters reported earlier this year that the AI server liquid-cooling market was expected to nearly double to more than US$17 billion in 2026.  

The acquisition also fits Blackstone’s broader exposure to AI infrastructure. The alternative asset manager expects to invest or commit roughly US$100 billion across its data center portfolio by the end of 2026 and says its global data center platform, including projects under construction, has reached about US$165 billion, with another US$160 billion in its development pipeline.  

Key Signal

“The latest generations of high-performance AI infrastructure increasingly rely on liquid cooling technology.” Bilal Khan and Mark Zhu, Blackstone  

Regional Relevance

United States. The acquisition highlights how AI infrastructure investment is spreading beyond GPUs and data center real estate into the components required to operate increasingly dense computing systems. The International Energy Agency expects U.S. data center electricity consumption to rise about 130% between 2024 and 2030, adding roughly 240 TWh of demand. Cooling and other infrastructure are expected to account for a meaningful share of the increase.

The transaction also places another U.S.-based supplier inside Blackstone’s expanding AI infrastructure portfolio. As hyperscalers deploy more powerful accelerators, thermal management is becoming a larger part of the physical supply chain supporting AI computing.

Cincinnati and the broader U.S. manufacturing market. FCH’s expansion shows how AI spending is creating opportunities for industrial manufacturers outside traditional semiconductor hubs. Blackstone plans to support additional capacity expansion, while Audax’s retained minority stake gives the previous owner continued exposure to growth in liquid cooling demand.

The Other Side

Could more efficient AI chips reduce the need for cooling infrastructure?
Efficiency gains could moderate power consumption per workload, but higher compute density and expanding AI usage may offset those improvements. Nvidia’s next-generation systems continue to push rack-level power requirements higher, keeping thermal management central to data center design.

Is Blackstone increasing its exposure to an AI infrastructure cycle that could slow?
Yes. The scale of data center investment assumes continued growth in AI workloads. Reuters has noted parallels between today’s infrastructure buildout and previous technology investment cycles, where capacity expanded faster than demand. Blackstone, however, has maintained that broader AI adoption should continue supporting infrastructure requirements.

Why acquire components instead of another data center operator?
Owning exposure to cooling equipment gives Blackstone another position in the AI infrastructure value chain. FCH can benefit from higher-density computing deployments regardless of which hyperscaler, chipmaker or data center operator ultimately captures the largest share of AI demand.

Sources & Transparency

Read more