8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 1, 2022

FLEX LTD.

(Exact Name of Registrant as Specified in Its Charter)

Singapore	0-23354	Not Applicable
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)
2 Changi South Lane, Singapore		486123
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (65) 6876-9899

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Ordinary Shares, No Par Value	FLEX	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
	Emerging growth company	☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.		☐

Item 8.01 Other Events.

TPG Rise Climate Investment in Nextracker

On February 2, 2022, Flex Ltd. (the “Company”) issued a press release (the “Press Release”) announcing the closing of the sale of Series A convertible preferred units of Nextracker LLC (“Nextracker LLC” or “Nextracker”). A copy of the Press Release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

Issuance and Sale of Series A Preferred Units of Nextracker

As announced publicly by the Company, on February 1, 2022, affiliates of the Company entered into a purchase agreement (the “Purchase Agreement”) with TPG Rise Flash, L.P., a Delaware limited partnership, which is managed or advised by TPG Rise Climate, TPG, Inc.’s dedicated renewables and climate investing fund (“TPG Rise”), for the sale of 500,000 Series A Preferred Units (the “Preferred Units”) in Nextracker LLC for an aggregate purchase price of $500,000,000 (the “Preferred Sale”). TPG Rise’s investment in approximately 16.67% of Nextracker LLC reflects an implied value for Nextracker LLC as of the date of the investment of $3.00 billion.

Dividends. The Preferred Units have a dividend rate of 5% per annum, payable semi-annually, up to 100% of which (less an amount necessary to fund TPG Rise’s tax obligations) may be payable in kind during the first two years following the closing of the Preferred Sale, and 50% of which may be payable in kind thereafter.

Conversion Ratio. The Preferred Units will be automatically converted into common units of Nextracker LLC upon a qualified initial public offering (a “Qualified Public Offering”) and TPG Rise may elect to convert the Preferred Units into common units at any time after March 31, 2023. Subject to certain exceptions, for any mandatory or optional conversion, the conversion ratio for each Preferred Unit will be based on a deemed value of Nextracker LLC equal to the lesser of $3.00 billion and the implied equity valuation of Nextracker LLC determined by the underwriters engaged in connection with a Qualified Public Offering. If a Qualified Public Offering occurs by March 31, 2023 with an implied equity valuation greater than $3.75 billion, then the conversion ratio will be adjusted upwards based on a deemed value of Nextracker LLC equal to $3.20 billion. If a Qualified Public Offering occurs after March 31, 2023 with an implied equity valuation between $2.70 billion and $3.00 billion, then the conversion ratio will be based on a deemed value of Nextracker LLC equal to $3.00 billion. If a Qualified Public Offering occurs after March 31, 2023 with an implied equity valuation of less than $2.70 billion, then the conversion ratio will be based on a deemed value equal to the implied equity valuation of Nextracker LLC in the Qualified Public Offering divided by 90%. If TPG Rise elects to convert the Preferred Units prior to an initial public offering, the conversion ratio shall be based on a deemed value of Nextracker LLC equal to $3.00 billion.

Repurchase. At TPG Rise’s election, the Company is required to repurchase all of the outstanding Preferred Units at their liquidation preference, which shall include all contributed but unreturned capital plus accrued but unpaid dividends, at the earlier of certain change in control events and February 2, 2028. Additionally, if Nextracker has not completed a Qualified Public Offering prior to February 2, 2027, then TPG Rise may cause the Company to repurchase all of the outstanding Preferred Units at their fair market value (determined by a mutually agreeable third-party appraiser).

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Voting Rights. The Preferred Units will vote together with the common units of Nextracker as a single class in all matters that are subject to a vote by common unitholders. In connection with the Preferred Sale, TPG Rise has the right to designate two members of the Board of Nextracker LLC; if, however, TPG Rise owns Preferred Units or common units with a fully diluted ownership percentage of less than 10% but more than 5%, the number of Board members that TPG Rise will be entitled to designate will be reduced to one. TPG Rise has initially designated Jonathan Coslet and Steven Mandel, and accordingly, Nextracker LLC has, as of the date of the Preferred Sale, appointed Messrs. Coslet and Mandel to the Board of Nextracker LLC. So long as at least 51% of the Preferred Units remain outstanding, the consent of the holders of the Preferred Units must be obtained prior to taking certain actions regarding Nextracker LLC, including, but not limited to, changes to the terms of the Preferred Units that adversely affect the rights of holders of the Preferred Units, certain incurrences of indebtedness by Nextracker, certain capital expenditures, acquisitions or dispositions by Nextracker, and changes to the Board and management of Nextracker.

Conversion to Limited Liability Company. In connection with the Preferred Sale, Nextracker Inc. (the predecessor to Nextracker LLC) was converted to a limited liability company and will remain a subsidiary of the Company until the disposition of the securities of Nextracker LLC, in an initial public offering or other corporate transaction. The conversion of Nextracker Inc. is intended to facilitate an initial public offering in the future through what is commonly referred to as an umbrella partnership-C Corporation or an “Up-C” structure.

Separation and Transition Services Agreements. At the closing of the Preferred Sale, the Company, Flextronics International USA, Inc. and Nextracker LLC entered into a separation agreement to formally separate the operations of the two businesses and have agreed to a transition services agreement to transition the Nextracker business into a separate business. The Company will report the Nextracker business as a separate operating segment in the future.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.
99.1	Press release, dated February 2, 2022, issued by Flex Ltd.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		FLEX LTD.
Date: February 2, 2022
	By:	/s/ Paul R. Lundstrom
		Name: Title:	Paul R. Lundstrom Chief Financial Officer

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EX-99.1

Exhibit 99.1

PRESS RELEASE

Nextracker announces investment and partnership with TPG Rise Climate

•Strategic partnership with TPG to support long term growth and innovation at Nextracker

•$500 million convertible preferred equity investment represents an implied $3.0 billion enterprise value for Nextracker

•Flex and Nextracker have entered into a separation agreement to formally separate into two businesses

San Jose, Calif., February 2, 2022 – Flex (NASDAQ: FLEX) announced today that it has entered into an agreement to sell $500 million of convertible preferred equity in Nextracker to TPG Rise Climate, the dedicated climate investing strategy of TPG’s global impact investing platform TPG Rise. Through this strategic partnership and investment from TPG Rise Climate, Nextracker will continue to expand its market leading position in solar tracking and software solutions. TPG’s experience and extensive network in renewable energy provide Nextracker a strong partner to support long-term growth.

“We are pleased to announce this exciting partnership today that furthers Nextracker’s leadership, backed by this strategic investment from TPG Rise Climate,” said Revathi Advaithi, Flex Chief Executive Officer.

“Nextracker has established itself as leader in the solar tracking space by developing and deploying best-in-class product quality, technology, value, and flexibility,” said Jonathan Coslet, Vice Chairman of TPG. “As global solar installations continue to grow across the US and globally, Nextracker is well-positioned to be the long-term tracking provider of choice for solar developers and EPCs. We look forward to the value creation from our combined resources, experience, and expertise,” added Steven Mandel, Business Unit Partner in TPG Rise.

As part of the investment, Coslet and Mandel will join the Nextracker board.

The investment is at an implied enterprise value for Nextracker of $3.0 billion, in the form of a convertible preferred security with a 5.0% annual dividend. The convertible preferred security will convert into common equity of Nextracker at the time of a qualified initial public offering for Nextracker. Net proceeds from the transaction will be used to help fund growth and generate returns for Flex shareholders in accordance with its capital allocation policy.

Flex and Nextracker have also entered into a separation agreement to formally separate the operations of the two businesses and have agreed to a transition services agreement to efficiently transition the Nextracker business into a separate business. Flex will report the Nextracker business as a separate operating segment in the future. Nextracker confidential S-1 remains on file with the SEC. The initial public offering and its timing are subject to market and other conditions and the SEC’s review process.

Advaithi added, “We continue to look at the market and will evaluate the right time to do a transaction, but we remain committed to creating value for shareholders.”

TPG Rise’s experience investing in clean energy generation and storage has the potential to drive additional growth opportunities. Since 2018, The Rise Fund has made multiple investments in Fourth Partner Energy, India’s largest distributed solar company. In 2020, The Rise Fund financed and launched Matrix Renewables which now has a 2 GW portfolio of operational, under construction, or near ready-to-build renewable energy projects with a further 2 GW of development pipeline of across Europe, the US, and Latin America. TPG Rise is also an investor in Form Energy, a technology company developing a new class of cost-effective, multi-day energy storage systems.

Conference Call Details

Flex CEO Revathi Advaithi; Jim Coulter, TPG Founding Partner and Executive Chairman, Managing Partner of TPG Rise Climate; and Nextracker CEO Dan Shugar will host a call for investors and media on February 2, 2022, at 1:30 p.m. Pacific time / 4:30 p.m. Eastern time regarding this transaction.

•U.S.: (877) 201-0168

•International: (647) 788-4901

•Conference ID: 7454879

•Webcast: https://investors.flex.com/events-and-presentations/default.aspx

Advisors

PJT Partners and JP Morgan are serving as financial advisors, and Sidley Austin is serving as legal advisor to Flex on this transaction. Kirkland & Ellis is serving as legal advisor to TPG Rise Climate.

About Flex

Flex (Reg. No. 199002645H) is the manufacturing partner of choice that helps a diverse customer base design and build products that improve the world. Through the collective strength of a global workforce across 30 countries and responsible, sustainable operations, Flex delivers technology innovation, supply chain, and manufacturing solutions to diverse industries and end markets.

About Nextracker

Nextracker is the leading provider of intelligent, integrated solar tracker and software solutions used in utility-scale and ground-mounted distributed generation solar projects around the world. Our products enable solar panels in utility-scale power plants to follow the sun's movement across the sky and optimize plant performance. With over 50 GW shipped worldwide, Nextracker leads the solar industry with solar tracker technologies that optimize and increase energy production while reducing costs for significant plant ROI. For more information, please visit www.Nextracker.com.

About TPG Rise Climate

TPG Rise Climate is the dedicated climate investing strategy of TPG's global impact investing platform TPG Rise. TPG Rise Climate pursues climate-related investments that benefit from the diverse skills of TPG's investing professionals, the strategic relationships developed across TPG's existing portfolio of climate-focused companies, and a global network of executives and advisors. The fund takes a broad-based sector approach to investment types, from growth equity to value-added infrastructure, and focuses on five climate sub-sectors:

clean energy, enabling solutions, decarbonized transport, greening industrials, and agriculture & natural solutions. Jim Coulter, TPG Founding Partner and Executive Chairman, serves as Managing Partner of TPG Rise Climate and former U.S. Treasury Secretary Hank Paulson serves as TPG Rise Climate's Executive Chairman. For more information, please visit www.therisefund.com/tpgriseclimate.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of U.S. securities laws, including: statements related to future expected revenues and earnings per share; and our consideration of alternatives relating to our Nextracker business. These forward-looking statements involve risks and uncertainties that could cause the actual results to differ materially from those anticipated by these forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements. These risks include: the effects of the COVID-19 pandemic on our business, results of operations and financial condition; that we may not achieve our expected future revenues and earnings; the effects that the current macroeconomic environment could have on our business and demand for our products; the impact of component shortages and logistical constraints, including their impact on our revenues; uncertainties and risks relating to our ability to successfully complete a transaction for our Nextracker business, including the potential initial public offering of our Nextracker business, including the possibility that we may not be able to consummate the transaction on the expected timeline or at all, or that we will achieve the anticipated benefits, including tax efficiencies, of the transaction: the possibility that we may not fully realize the projected benefits of the Anord Mardix acquisition, including our expectation that the acquisition will be accretive to our fiscal year 2023 adjusted earnings per share; the effects that current credit and market conditions could have on the liquidity and financial condition of our customers and suppliers, including any impact on their ability to meet their contractual obligations to us; the challenges of effectively managing our operations, including our ability to control costs and manage changes in our operations; litigation and regulatory investigations and proceedings; our compliance with legal and regulatory requirements; the possibility that benefits of the Company’s restructuring actions may not materialize as expected; that the expected revenue and margins from recently launched programs may not be realized; our dependence on industries that continually produce technologically advanced products with short product life cycles; the short-term nature of our customers’ commitments and rapid changes in demand may cause supply chain and other issues which adversely affect our operating results; our dependence on a small number of customers; our industry is extremely competitive; we may be exposed to financially troubled customers or suppliers; geopolitical risk, including the termination and renegotiation of international trade agreements and trade policies, including the impact of tariffs and related regulatory actions; the success of certain of our activities depends on our ability to protect our intellectual property rights and we may be exposed to claims of infringement or breach of license agreements; a breach of our IT or physical security systems, or violation of data privacy laws, may cause us to incur significant legal and financial exposure; we may be exposed to product liability and product warranty liability; and that recently proposed changes or future changes in tax laws in certain jurisdictions where we operate could materially impact our tax expense. In addition, the COVID-19 pandemic increases the likelihood and potential severity of many of the foregoing risks.

Additional information concerning these, and other risks is described under “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our annual report on Form 10-K for the fiscal year ended March 31, 2021 and in subsequent quarterly reports on Form 10-Q. The forward-looking statements in this press release are based on current expectations and Flex assumes no obligation to update these forward-looking statements. Our share repurchase program does not obligate the Company to repurchase a specific number of shares and may be suspended or terminated at any time without prior notice. This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities. Any

securities to be offered in any offering may not be sold nor may offers to buy be accepted prior to the time a registration statement becomes effective.

Investors & Analysts

David Rubin

Flex

Vice President, Investor Relations

investor.relations@flex.com

Media & Press

Mark Plungy

Flex

Director, Corporate Integrated Communications

(408) 442-1691

Mark.Plungy@flex.com

Ari Cohen

TPG

Director, External Affairs

(415) 743-1550

media@tpg.com

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Cover Document	Feb. 02, 2022
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Feb. 01, 2022
Entity File Number	0-23354
Entity Registrant Name	FLEX LTD.
Entity Central Index Key	0000866374
Entity Tax Identification Number	00-0000000
Entity Incorporation, State or Country Code	U0
Entity Address, Address Line One	2 Changi South Lane
Entity Address, City or Town	Singapore
Entity Address, Country	SG
Entity Address, Postal Zip Code	486123
City Area Code	65
Local Phone Number	6876-9899
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Ordinary Shares, No Par Value
Trading Symbol	FLEX
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false