Amazon has received warrants to buy up to $340 million of Generac shares as part of an agreement under which the company will supply backup electric generators for Amazon data centres.
Generac disclosed the arrangement in a Wednesday filing with the Securities and Exchange Commission. The deal combines a long-term equipment supply contract with an equity-based investment, giving Amazon the right to buy up to 1.69 million Generac shares at $200.93 per share.
Approximately 308,000 of the warrant shares will vest immediately. The remaining portions will become available only if Amazon meets its payment obligations for the generators. The warrants represent nearly 3% of Generac's outstanding shares.
Initial generator deliveries in 2027 and 2028 are expected to total $2.4 billion. The potential value of the investment under the agreement could reach $8 billion, although the expected volume of deliveries beyond the initial $2.4 billion was not specified.
The arrangement comes as Amazon Web Services expands data-centre capacity in response to soaring demand for artificial intelligence computing. By linking the supply contract to warrants in Generac, Amazon has tied part of the equipment maker's potential equity value to the execution of a large-scale infrastructure agreement.
Generac had a market capitalisation of about $10.3 billion at the close of trading on Wednesday. Its shares rose by more than 40% in after-hours trading on Wednesday following the disclosure.
The filing establishes immediate vesting for part of the warrant grant and makes the remainder conditional on Amazon's payments. It does not establish when Amazon might exercise the warrants or when the remaining warrant shares could vest.
Comments (0)