CLEVELAND, June 19, 2025 ~ According to a recent industry report released by the Engineered Equipment investment banking team from Brown Gibbons Lang & Company (BGL), the data center cooling, power management, and instrumentation sectors are poised for significant growth. The report, titled "BGL Engineered Equipment Insider," can be downloaded and read on the BGL website.

Justin Wolfort, a Director within BGL's Engineered Equipment investment banking team, stated that participants in the environmental controls and power management sectors serving the data center market are experiencing unprecedented growth. This is due to increasing energy efficiency requirements and instrumentation demands to ensure uptime. Wolfort also noted a rise in investor interest in both mature and emerging technologies utilized in this space.

The report delves into the development of data centers, where exponential growth fueled by emerging technologies such as artificial intelligence (AI) is generating a significant need to displace heat. As future power requirements continue to increase, there is a growing demand for innovative solutions that can reduce energy consumption.

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Key takeaways from the report include an increased focus on energy efficiency and evolving regulatory climate driving demand for engineered equipment. This has led to growing interest from investors in the HVAC equipment sector in recent years. Notable M&A activity by both strategic and financial investors further indicates a market ripe for consolidation and investment.

Investment in advanced cooling technologies has also been on the rise to accommodate the demand for more efficient and sustainable power. This has resulted in strong HVAC M&A activity as componentry suppliers seek to diversify their data center offerings. Recent strategic transactions involving liquid cooling companies such as Motivair (acquired by Schneider Electric) and TMGcore (acquired by Modine Manufacturing) are examples of this trend.

BGL's Engineered Equipment investment banking team has extensive experience working with companies that produce highly engineered equipment and machinery used in various end markets. This includes flow control, emission control, HVACR systems and components, clean technology, energy transition and decarbonization technology, process and automation equipment, material handling and conveyance, electronic and electrical equipment, precision-engineered tools and machine componentry, and finished production equipment.

With the data center market experiencing robust demand and evolving technologies, the report suggests that there are significant opportunities for consolidation in the fragmented HVAC equipment landscape. As strategic and financial investors continue to show interest in this sector, it is expected that M&A activity will remain strong in the coming years.

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