11:03 AM EDT, 05/19/2025 (MT Newswires) -- Advanced Micro Devices ( AMD ) agreed to sell ZT Systems' data center infrastructure manufacturing business to Sanmina ( SANM ) in a cash-and-stock deal that makes the US-based contract manufacturer a preferred partner of AMD for building artificial intelligence solutions.

The ZT Systems deal is valued at $3 billion, including a $450 million contingent consideration, the companies said in separate statements on Monday. The transaction, which requires regulatory approvals, is anticipated to close toward the end of 2025.

Sanmina ( SANM ) becomes a preferred new product introduction partner for AMD cloud rack and cluster-scale AI solutions. AMD bought ZT Systems earlier this year, and had already announced plans to sell ZT Systems' server manufacturing business once the transaction closes.

"By combining the deep experience of our AI systems design team with our new preferred NPI partnership with Sanmina ( SANM ), we expect to strengthen our US-based manufacturing capabilities for rack and cluster-scale AI systems and accelerate quality and time-to-market for our cloud customers," said Forrest Norrod, general manager, data center solutions business at AMD.

AMD said Monday that it will retain ZT Systems' AI solutions design and customer enablement operations. Sanmina ( SANM ) said it secured $2.5 billion in financing from Bank of America to help fund the acquisition.

ZT Systems has an annual net revenue run-rate of $5 billion to $6 billion, according to Sanmina ( SANM ). "The outlook ahead is promising as new accelerated compute platforms are launched," the company said.

"The acquisition of ZT Systems' manufacturing operations positions Sanmina ( SANM ) as an industry leader in the cloud and AI ecosystem and enables us to further capitalize on the significant growth opportunity of this market," Sanmina ( SANM ) Chief Executive Jure Sola said.

Sanmina ( SANM ) expects the acquisition to be accretive to its non-GAAP earnings per share in the first year after closing, with further accretion anticipated in the future.

Shares of Sanmina ( SANM ) were down 6% intraday Monday, while AMD's fell 1.8%.

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