Dycom’s Power Solutions acquisition bolsters its data center reach

Dycom has continued to respond to demand for the build-out of long-haul and middle-mile fiber networks and campus data center interconnects to accommodate growing data usage and AI traffic.  

Daniel Peyovich, CEO of Dycom, said that we have been “bringing fiber inside the fence, and inside the data centers to the meet-me room,” and the acquisition of Power Solutions is the logical and critical next step.”

“It enables us to immediately offer a comprehensive service that extends from the core network to the heart of the data hall, providing full electrical and low-voltage services throughout the data center,” he said. “This is a significant milestone for Dycom that enhances our position and capability to address the fast-growing digital infrastructure market, extends our platform for long-term growth, and does so in a way that is immediately accretive to our financial performance.”

Data center rising

Dycom, which has been gaining ground by supporting fiber providers that deliver service to data centers and data center providers, sees potential in the growth of the data center market.

The company noted in its acquisition announcement that the data center infrastructure market is “poised for significant growth.”

While cloud migration efforts are projected to sustain a 16% CAGR on their own, analysts estimate total U.S. demand for data center capacity could grow at a 20%-25% CAGR through 2030, with gen-AI driving the acceleration.

By acquiring Power Solutions, Dycom gains exposure to one of the fastest-growing infrastructure sectors, with over 90% of Power Solutions’ revenue coming from data center projects.

Peyovich said its “agreement to acquire Power Solutions immediately positions Dycom at the heart of the explosive demand for digital and AI infrastructure.”

The DMV factor

In addition to Power Solutions' experience as an electrical contractor, the company serves the District of Columbia, Maryland, and Virginia (DMV) region, which is the nation’s largest data center market.

Northern Virginia, and the "Data Center Alley" in Loudoun County, has become a primary data center hub. Driven by a robust fiber infrastructure, tax incentives, and proximity to the U.S. government, the DMV region has a large concentration of data centers. The area currently hosts over 300 facilities and accounts for a significant share of global internet traffic. It is projected to be the world's first two-gigawatt data center market.

Major technology companies such as Amazon Web Services (AWS), Microsoft, Google, Meta, and Oracle all have facilities located in Northern Virginia. Key data center operators in the region include CoreSite, Equinix, Digital Realty, QTS, CyrusOne, and Iron Mountain. 

However, the market isn’t without its challenges. In both Virginia and Maryland, there has been strong opposition to new data center projects due to noise, environmental impacts, power consumption, and rising energy costs. Prince George's County in Maryland, for example, is currently considering pausing new data center development due to these concerns.

Nevertheless, Power Solutions has established itself as one of the largest electrical contractors for this market. The company has a current backlog exceeding $1 billion, solidifying its strong position in the DMV region. Moreover, over 90% of the company’s revenue comes from data centers, with repeat customers and end users.

“The DMV is the largest data center region in the world, representing 27% of total operational capacity in US markets today,” Peyovich said. “DMV is projected to capture 30% of U.S. data center capacity currently under construction and planned, providing Dycom with substantial opportunities for growth in the world’s fastest-growing data center region.”

Cross-sell opportunities

Dycom’s acquisition of Power Solutions immediately broadens the company’s capabilities to address not only the attractive DMV region but also the data center industry as a whole.

Power Solutions complements Dycom’s fiber network expertise while diversifying its services by adding Power Solutions’ electrical contracting capabilities.

The acquisition will benefit both companies by enabling Power Solutions to scale its operations and to offer electrical and fiber construction services to multiple infrastructure players simultaneously. It will also increase Dycom’s total skilled labor capacity, bringing its workforce to over 2,800 employees.

Power Solutions’ sizable workforce made it an attractive acquisition target as it complements Dycom’s already wide-reaching capabilities. Today, Dycom’s workforce is distributed across all 50 U.S. states, serving traditional carriers and data center providers.

“Power Solutions adds to that collective,” Peyovich said. “Now, there's a different skill set, right? They will come in and work on the electrical components inside. But ultimately, when you're mobilizing a skilled workforce of this size to do projects of this kind of complexity and this kind of magnitude, how you manage that and how you do it are very, very similar.”

Dycom has high hopes for the data center opportunity. During its second-quarter 2026 earnings call, Peyovich estimated the addressable market for Dycom based on spend on outside-plant data center network infrastructure to be over $20 billion over the next 5 years alone.

“There's been a lot of press from our customers that really reinforces the $20 billion addressable market that we talked about over the next five years, specific to the outside plant,” he said. “That's inside-the-fence work, it's long haul, it's middle mile--completely separate and distinct from what we will see with Power Solutions joining the Dycom family. So, that $20 billion we really 8 believe is a conservative number and continues to grow.”

He added that the Power Solutions acquisition expands the $20 billion target, giving it “cross-sell opportunities with the hyperscalers.”

“We can have a different level of conversation on how, ultimately, we meet the needs that they have, which everybody knows are significant. And really, even in the most conservative estimates of what the AI race could yield, even in the most conservative estimates, we're talking about massive infrastructure.”

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