Windjammer Capital recently made its latest bet on the AI boom—but its target was not a data center. Instead, it invested in Minnesota-based PDU Cables, a founder-owned business that makes power distribution cables for the facilities fueling AI.
While gargantuan buyouts—such as Global Infrastructure Partners’ recent $40 billion takeover of Aligned Data Centers—have been dominating the headlines, middle-market firms like Windjammer have been quietly focusing on specialized makers of the building blocks that keep these facilities running.
“There’s a lot of interest in the ancillary products that are critical to building and operating data centers,” said Mike Barina, managing director at Robert W. Baird, referring to manufacturers and suppliers of electrical equipment, security products and thermal management systems that keep data centers running. “They don’t have major technology risk but are a core part of that ecosystem. I think that’s a great spot for middle-market private equity.”
In other words, instead of fronting massive checks for full-scale complexes or energy plants, these middle-market firms are carving out a niche by backing electrical cables, switchgears, cooling systems and the like. And they see them as safer bets than assets like GPUs, which face higher risks of technology obsolescence.
According to Gregory Bondick, a managing principal at Windjammer, the firm typically targets companies with $20 million to $40 million in annual EBITDA, with some reaching as much as $65 million.
Baird acted as the sell-side adviser to PDU Cables on the sale process.
In today’s market, these data center equipment makers typically draw more competitive auctions than regular industrial businesses—sometimes attracting twice as many bidders, Barina added.
Growing the natural way
PE firms are also drawn to those businesses’ potential for organic expansion, without the need for M&A—and the complications that come with it.
“You don’t necessarily have to have an M&A strategy to be successful in that market,” Barina said. “There is higher organic growth here, so a PE model can work quite well, even without acquisitions.”
Some companies have organically doubled sales in just one or two years, he added.
That view is echoed by Bondick of Windjammer, who expects PDU Cables’ business to remain sustainable and growing in the long term thanks to power demand.
“Our equity return story is really driven by organic growth initiatives,” Bondick said. “If we can accelerate that through M&A, we’d be glad to do that. But in general, when we look at this business, there’s simply significant demand for it over the long term.”
That said, Bondick sees room for the company to strengthen its sales. PDU Cables works with a wide range of customers across different regions—from hyperscalers to landlords to contractors—which introduces complexity to driving consistent sales growth. Windjammer plans to assist the company in developing more efficient go-to-market strategies to accelerate sales, he added.
Related read: Analyst Note: Deep-Dive into Electrical Contracting
PE investments in electrical equipment companies have accelerated since 2021. Overall, deal count that year jumped to 241, and stayed above 200 through 2024.
Globally, PE firms have notched 152 deals in the sector so far this year, totaling $19.34 billion in capital invested, according to PitchBook data through Oct. 1. If deal activity remains at its current pace, 2025 is on track to be the fifth year in a row with deal count reaching above 200.
Beyond electrical cables, Bondick saw more capital flowing to companies making power distribution equipment, such as busbars, cable power boxes and switchgears. Providers of HVAC systems and advanced cooling technologies designed to remove excess heat in data centers are also drawing increased interest.
Windjammer, which manages about $3 billion in assets, also owns other industrial companies that are poised to benefit from the data center spending bonanza, such as AXH, a manufacturer of air-cooled heat exchangers used in natural gas production.
It recently sold Paragon Energy Solutions, which provides safety systems for nuclear reactors, to Mirion Technologies for about $585 million.
Featured image by Josie Doan/PitchBook News
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