Virginia Transformer’s products are essential in settings including steel mills and data centres. Credit: Dr Tom Photography/Shutterstock.

Virginia Transformer is exploring a sale that could value the company at more than $6bn amid rising electricity demand, reported Bloomberg, citing people familiar with the matter.

The company is working with an adviser to assess buyer interest. Although discussions are ongoing, there is no guarantee that a sale will occur and the company has not commented on the matter.

Founded in the early 1970s, Virginia Transformer, led by CEO Prabhat K Jain, is one of the largest US-owned power transformer manufacturers in North America.

Its products are essential in various settings, including steel mills and data centres. A recent report by power sector consultancy Grid Strategies forecasts a nearly 16% increase in US electricity demand over the next five years, fuelled by new data centres and factories.

This anticipated growth, coupled with the need to update ageing electrical infrastructure, positions companies such as Virginia Transformer as potential acquisition targets.

The industry is currently facing challenges in meeting the soaring demand for grid equipment, as noted by Hitachi Energy, a transformer producer. Other significant players in the market include GE Vernova, HD Hyundai Electric and Schneider Electric.

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The sector’s benchmark transaction was the 2018 purchase of ABB’s power grid division by Hitachi in a deal valued at $11bn, including debt.

Despite the robust demand for industrial products and services, deal volume in the sector dipped by 3% to approximately $516bn in 2024, as per Bloomberg data.

Recently, Virginia Transformer has manufactured transformers, including two 16.8/28MVA, 69/12.47kV power distribution transformers for East River Electric Power Cooperative in South Dakota; a pair of 10/14MVA, 43.8/13.2kV transformers for Central Power Electric Cooperative in North Dakota; and a 28/466.7MVA, 138/26.4kV transformer for Oncor in Texas.