Generac Scores $8B Deal with Amazon, Tripling Generator Capacity

Generac, the energy hardware maker, has announced an $8 billion deal with Amazon to provide backup power for its growing network of data centers. The deal is a massive win for Generac, according to William Blair analysts, who stated that it 'provides clarity regarding the demand underpinning management's recently announced plan to triple manufacturing capacity for large-format generators by August 2027.'

The agreement will see Generac deliver up to $8 billion worth of generators to Amazon over a period of time. Specifically, $2.4 billion of these generators are expected to be delivered within the next two years. This deal is not only significant for Generac but also for Amazon, as it aims to ensure that its data centers have reliable backup power.

Amazon will purchase up to 1.69 million shares of Generac at a premium of about 15% to Generac's Wednesday close of $175. This warrant is worth approximately $340 million in total and includes contingencies for payments over the next seven years.