Sanmina to acquire ZT Systems’ manufacturing operations from AMD for up to $3B

Sanmina (SANM) announced that it has entered into a definitive agreement to acquire the data center infrastructure manufacturing business of ZT Systems, a provider of Cloud and AI infrastructure to the world’s largest hyperscalers, from AMD (AMD). The strategic acquisition further establishes Sanmina’s position as an industry-leading, vertically integrated global manufacturing solutions provider that can now also accelerate its customers’ at scale deployments of cutting-edge AI systems for the data center. Under the terms of the agreement, Sanmina has agreed to acquire ZT Systems’ manufacturing operations for $2.25B of cash to pay for assets at target net asset value (with adjustment mechanism), $300M premium consisting of 50% cash / 50% equity and a $450M contingent consideration based on financial performance of the business over the next three years, for up to $3B total. The inclusion of equity and a long-term contingency in the consideration further align Sanmina and AMD’s interests in connection with the entry into the new strategic partnership. The Sanmina equity issued to AMD will be subject to a lock-up period of 3 years, which begins at the time of closing, during which equity sales are limited to 33% in the first year, 33% in the second year, and the remaining equity in the third year. In connection with the transaction, Sanmina has obtained committed financing from Bank of America for $2.5B. This transaction has been unanimously approved by the Sanmina Board of Directors. It is expected to close near the end of the 2025 calendar year, subject to regulatory approvals and customary closing conditions.