SLB NV (NYSE:SLB) announced on August 31 that it will acquire Kelvion from Apollo Global and funds advised by Triton for around $3.4 billion in cash and the assumption of approximately $0.7 billion of debt. Kelvion specializes in thermal management and heat exchange technologies, with a strategic focus on serving data centers.
The deal comes as the world’s largest oilfield services company seeks to expand its data center business and capitalize on the AI-driven boom in demand for power and cooling infrastructure. According to SLB, the Kelvion acquisition will broaden the range of equipment it can supply to customers and more than double its revenue opportunity per gigawatt of delivered capacity.
The company expects the transaction to be accretive to both earnings per share and free cash flow per share in the first 12 months after closing. It also projects the deal to generate approximately $120 million in annual EBITDA synergies within three years of closing.
Moreover, SLB clarified that the Kelvion acquisition will not come at the expense of shareholder returns. The company reaffirmed its target to return more than $4 billion to shareholders this fiscal year, with total annual shareholder returns expected to at least match 2026.
The transaction is expected to close in the first half of 2027.
Olivier Le Peuch, Chief Executive Officer of SLB, commented:
“AI is driving the most significant infrastructure investment cycle in our lifetime. This transaction accelerates our ambition to become an industrial technology partner to the data center industry and help customers address the growing infrastructure complexity required to scale AI. Kelvion advances our path toward more integrated data center infrastructure solutions, expands our addressable market — more than doubling our revenue opportunity per gigawatt of delivered capacity — and allows us to scale both our offerings and the global reach of the business.”
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Cooling the AI Boom Could Heat Up SLB’s Growth :
The deal reflects a broader strategic shift among oilfield service providers towards supplying power equipment, turbines, and data center solutions as drilling activity slows and more rigs are being idled around North America. The Kelvion acquisition helps SLB to diversify away from the cyclical nature of oilfield spending by giving it a critical piece of the data center value chain. As data centers become more power-intensive and generate more heat, cooling infrastructure is becoming increasingly essential.
The financial opportunity is also substantial. On a pro forma basis, SLB and Kelvion are expected to generate over $2 billion in data center revenue and $300 million in adjusted EBITDA this year. SLB aims to build on this foundation by growing its combined data center solutions business to $4.5 billion-$5 billion in revenue and $700 million-$800 million in adjusted EBITDA by 2028.
Data Center Spending May Not Last Forever:
The biggest concern is that of a potential AI bubble. SLB is betting substantial capital on a business whose payoff depends on continued data center construction and successful integration. There is a risk that hyperscalers may be investing too aggressively in data centers before the economic returns from those investments become clear. If returns fall short of expectations and AI spending eventually slows, SLB’s potential growth opportunity could be smaller than expected.
Conclusion:
SLB’s $4.3 billion acquisition of Kelvion bolsters its position in the ballooning data center infrastructure market, while helping it diversify beyond oilfield services. While execution and AI spending risks remain, the deal’s projected revenue growth and EBITDA synergies make it a compelling long-term strategic move.
Market Sentiment:
SLB NV was held by 79 hedge funds in the Insider Monkey database at the end of Q2 2026, up from 74 in the prior quarter. However, while the total number of hedge fund investors increased, their cumulative stake value declined from around $1.86 billion in Q1 to $1.35 billion in the second quarter.
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This article is originally published at Insider Monkey.
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