SLB’s $3.4B Kelvion Deal Targets AI Data Center Cooling Boom

Key Points

• SLB agreed to acquire Kelvion for approximately $3.4 billion in cash, plus the assumption of about $700 million in debt. The deal is expected to close in the first half of 2027, pending regulatory approvals and other customary conditions.
• The acquisition strengthens SLB’s position in the rapidly growing AI and data-center cooling market by adding Kelvion’s heat-exchange, air-cooling and heat-rejection technologies. SLB expects the combined data-center businesses to generate $4.5 billion to $5 billion in revenue and $700 million to $800 million in adjusted EBITDA in 2028.
• SLB projects approximately $120 million in annual EBITDA synergies within three years of closing and says the transaction will be accretive to earnings and free cash flow per share within the first 12 months.

SLB NYSE: SLB said it has agreed to acquire thermal management and heat-exchange technology provider Kelvion in a transaction valued at approximately $3.4 billion in cash, plus the assumption of about $700 million in debt. The company expects the acquisition to close in the first half of 2027, subject to customary conditions and regulatory approvals.

Kelvion is being acquired from Apollo Global Management, its majority owner, and funds advised by Triton, which hold a minority interest. SLB said it plans to finance the transaction using existing cash balances and debt.

Chief Executive Officer Olivier Le Peuch described the deal as a step toward making SLB an industrial technology partner to the data center sector, where rising computing density and artificial-intelligence workloads are increasing demand for cooling infrastructure.

“Thermal management is therefore becoming a critical enabling technology for next-generation computing infrastructure, including high-density data center and AI factories,” Le Peuch said. He said the combination would add Kelvion’s heat-exchange, air-cooling and heat-rejection products to SLB’s existing modular data-center infrastructure business.

Data Center Expansion

SLB said it initially entered the market through manufacturing services, site fabrication and modular infrastructure for hyperscale customers, later expanding into data-center design, engineering and systems integration. The company’s modular approach allows infrastructure to be manufactured, assembled and tested before delivery to a customer site, which it said can reduce on-site construction complexity and accelerate time to operation by up to 40%.

SLB expects its cumulative global data-center deliveries to exceed 2 gigawatts by the end of 2026. It said revenue from the business is projected to grow at a compound annual rate above 90% between 2024 and 2026, with the business on track to surpass a $2 billion annualized revenue run rate in 2027.

Le Peuch said the addition of Kelvion could increase SLB’s content per megawatt of delivered capacity and potentially more than double its revenue opportunity per gigawatt. He also cited a collaboration under which SLB will serve as modular design partner for NVIDIA DGX AI factories.

Kelvion’s data-center business is expected to generate $1.2 billion to $1.3 billion of revenue in 2026, representing more than half of the company’s expected total revenue. The business supplies OEM products for heat exchange, heat rejection and heat recovery, as well as modular data-center infrastructure.

Financial Profile and Synergies

Chief Financial Officer Stéphane Biguet said Kelvion is expected to generate $2.3 billion to $2.4 billion in 2026 revenue and $350 million to $400 million in adjusted EBITDA. About 55% of 2026 revenue is expected to come from data centers, Kelvion’s fastest-growing and most profitable end market. Kelvion’s remaining operations serve energy, power and diversified industrial markets, along with a services business.

Kelvion reported $1.5 billion in bookings during the first half of 2026, up 43% year over year, SLB said.

SLB expects to generate approximately $120 million in annual EBITDA synergies within three years after closing, with roughly 60% achieved in the second year. About $70 million is expected to come from cost savings, including supply-chain efficiencies, manufacturing optimization, general and administrative savings, and insourcing opportunities. The rest is expected from revenue opportunities, including broader access to SLB customers and expansion into Asia and the Middle East.

The company said the transaction should be accretive to earnings per share and free cash flow per share in the first 12 months after closing. On a pro forma basis, SLB’s and Kelvion’s data-center businesses are expected to produce more than $2 billion in revenue and about $300 million in adjusted EBITDA in 2026.

• Combined data-center bookings rose more than 130% year over year in the first half of 2026.
• The combined data-center book-to-bill ratio was 1.8 times during the first half of 2026.
• SLB expects the combined data-center businesses to generate $4.5 billion to $5 billion in revenue and $700 million to $800 million in adjusted EBITDA in 2028.

Capital Allocation and Market Reach

Biguet said capital expenditures for the data-center business are expected to be about 2% to 3% of revenue, with spending focused primarily on manufacturing capacity and related equipment. He said investments in the expanded business would be funded by its own cash flows and would not reduce capital allocated to SLB’s core divisions or digital business.

The acquisition will increase leverage, but SLB expects to remain within its stated full-cycle target of up to 1.5 times net debt to EBITDA. The company also reaffirmed its commitment to deliver more than $4 billion in shareholder returns through dividends and repurchases in 2026, while establishing $4 billion as a floor for total shareholder returns in 2027.

Kelvion will join SLB’s New Energy and Industrial business, led by Gavin Rennick. Le Peuch said the combined company sees opportunities beyond data centers in power, geothermal, carbon capture and industrial thermal-management applications. SLB estimates the addressable market for physical data-center infrastructure excluding IT and semiconductors could exceed $150 billion by the end of the decade.

About SLB (NYSE:SLB)

SLB NYSE: SLB, historically known as Schlumberger, is a leading global provider of technology, integrated project management and information solutions for the energy industry. Founded by Conrad and Marcel Schlumberger in 1926, the company develops and supplies products and services used across the exploration, drilling, completion and production phases of oil and gas development. Its offerings are intended to help operators characterize reservoirs, drill and complete wells, optimize production and manage field operations throughout the asset lifecycle.

SLB's product and service portfolio spans reservoir characterization and well testing, wireline and logging services, directional drilling and drilling tools, well construction and completion technologies, production systems, and subsea equipment.

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