Generac announced a long-term supply agreement with Amazon to provide backup power generators for data centers. Initial deliveries are expected in 2027 and 2028, with the first tranche valued at approximately $2.4 billion and the total agreement ceiling at up to $8 billion.
Generac rose 33% in pre-market trading.
As part of the deal, Generac issued warrants to Amazon's investment entity, Amazon.com NV Investment Holdings, allowing the purchase of up to approximately 1.69 million shares at an exercise price of $200.9266 per share, representing roughly 3% of Generac's outstanding shares. Of these, approximately 307,954 warrant shares vested immediately, with the remainder vesting in tranches contingent upon payments received from Amazon for generator deliveries.
Amazon frequently strengthens supply chain partnerships through warrant purchases or equity stakes in key suppliers. This agreement marks a significant expansion of Generac's presence in the critical mission power solutions market for data centers, building on an earlier undisclosed hyperscale operator deal announced in June.
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