MCKINNEY, Texas–(BUSINESS WIRE)–Encore Wire (NASDAQ: WIRE) immediately introduced that it has entered right into a definitive merger settlement underneath which Prysmian (BIT: PRY) will purchase Encore Wire (NASDAQ:) for $290.00 per share in money (the Transaction). The Transaction represents a premium of roughly 20% to the 30-day quantity weighted common share value (VWAP) as of Friday, April 12, 2024 and roughly 29% to the 90-day VWAP as of the identical date.
On the phrases of the Transaction, Encore Wire’s implied Enterprise Worth is roughly €3.9 billion1 representing a a number of of 8.2x EV/2023A EBITDA and 6.3x EV/2023A EBITDA together with run price synergies.
We’re happy to have reached an settlement that displays the exceptional worth Encore Wire has created with our expansive single-campus mannequin, low-cost manufacturing, centralized distribution and product innovation, stated Daniel L. Jones, Encore Wire’s Chairman, President and Chief Government Officer. This transaction maximizes worth for Encore Wire shareholders and supplies a lovely premium for his or her shares. Encore Wire and Prysmian are two extremely complementary organizations, and we anticipate a brilliant future for Encore Wire as a part of Prysmian. Moreover, as half of a bigger, world operation, we anticipate this transaction will carry extra future alternatives for our staff, whose dedication and arduous work made this transaction potential. We look ahead to working with Prysmian to finish this value-enhancing mixture and notice the numerous advantages that we anticipate it’s going to carry to all of our stakeholders.
The acquisition of Encore Wire represents a landmark second for Prysmian and a strategic and distinctive alternative to create worth for our shareholders and prospects, stated Massimo Battaini, Prysmian designated Group CEO. Via this acquisition, Prysmian will develop its North American presence, enhancing its portfolio and geographic combine, whereas considerably growing the publicity to secular development drivers. We look ahead to welcoming the Encore Wire group to Prysmian and benefitting from the mixed firm’s enhanced product choices and buyer relationships.
Following closing of the Transaction, Prysmian expects to take care of a major presence at Encore Wire’s vertically-integrated, single-site, McKinney, Texas campus.
Strategic Rationale2
Encore Wire is very complementary to Prysmian’s technique and, specifically, the Transaction will permit Prysmian to:
- enhance its publicity to secular development drivers;
- improve its publicity to North America;
- leverage Encore Wire’s operational effectivity and greatest at school service throughout Prysmian’s portfolio;
- broaden Prysmian’s product providing enabling the mixed firm to higher handle prospects’ wants in North America; and
- generate ~ €140m in run-rate EBITDA synergies anticipated inside 4 years from closing.
Professional Forma Financials3
Primarily based on professional forma aggregated outcomes for the twelve months ended December, 2023, the mixed group would have posted internet gross sales of over €17.7 billion and adjusted EBITDA of roughly €2.1 billion4.
The transaction shall be financed via a mixture of money on Prysmian’s Stability Sheet ( €1.1bn) and newly dedicated debt amenities ( €3.4 billion).
Approvals and Timing
The Transaction, which has been unanimously accepted by every firm’s Board of Administrators and really useful to its shareholders by Encore Wire’s Board of Administrators, is anticipated to shut within the second half of 2024, topic to approval of Encore Wire’s shareholders representing at the least a majority of the excellent shares, regulatory approvals, and different customary closing circumstances.
Beneath the phrases of the settlement, Encore Wire could solicit various acquisition proposals from third events throughout a 35-day go-shop interval following the date of execution of the merger settlement. There could be no assurances that the go-shop will end in a superior proposal. Encore Wire doesn’t intend to reveal developments associated to the solicitation course of till it determines whether or not such disclosure is suitable or is in any other case required.
J.P. Morgan Securities LLC is performing as sole monetary advisor to Encore Wire and O’Melveny & Myers LLP is performing as authorized advisor. Goldman Sachs Financial institution Europe SE, Succursale Italia is performing as sole monetary advisor to Prysmian and Wachtell, Lipton, Rosen & Katz is performing as authorized advisor.
Prysmian
Prysmian is a worldwide cabling options supplier main the power transition and digital transformation. By leveraging its broad geographical footprint and in depth product vary, its observe report of technological management and innovation, and a robust buyer base, the corporate is well-placed to capitalise on its main positions and win in new, rising markets. Prysmian’s enterprise technique completely matches key market drivers by growing resilient, high-performing, sustainable and progressive cable options within the segments of Transmission, Energy Grid, Electrification and Digital Options. Prysmian is a public firm listed on the Italian Inventory Alternate, with virtually 150 years of expertise, about 30,000 staff, 108 crops and 26 R&D centres in over 50 international locations, and gross sales of over €15 billion in 2023.
Encore Wire
Encore Wire is a number one producer of a broad vary of and aluminum electrical wire and cables, supplying energy technology and distribution options to fulfill our prospects’ wants immediately and sooner or later. The Firm focuses on sustaining a low-cost of manufacturing whereas offering distinctive customer support, rapidly transport full orders coast-to-coast. Our merchandise are proudly made in America at our vertically-integrated, single-site, Texas campus.
Further Data In regards to the Merger and The place to Discover It
This communication could also be deemed to be solicitation materials in respect of the merger (the Merger)of Encore Wire Company, (the Firm), with an affiliate of Prysmian S.p.A, an organization organized underneath the legal guidelines of the Republic of Italy (Father or mother). The Firm intends to file related supplies with the U.S. Securities and Alternate Fee (the SEC), together with a proxy assertion in preliminary and definitive type, in reference to the solicitation of proxies for the proposed Merger. The definitive proxy assertion will include essential details about the proposed Merger and associated issues. BEFORE MAKING A VOTING DECISION, STOCKHOLDERS OF THE COMPANY ARE URGED TO READ THE DEFINITIVE PROXY STATEMENT AND OTHER RELEVANT MATERIALS CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE COMPANY AND THE MERGER. Stockholders will be capable to receive copies of the preliminary and definitive proxy statements and different related supplies (once they turn into accessible) and some other paperwork filed by the Firm with the SEC for no cost on the SEC’s web site at www.sec.gov. As well as, stockholders will be capable to receive free copies of the proxy assertion from the Firm by going to the Firm’s Investor Relations web page on its company web site at https://www.encorewire.com/buyers/index.html.
Individuals within the Solicitation
The Firm, its administrators”Daniel L. Jones, Gina A Norris, William R. Thomas, W. Kelvin Walker, Scott D. Weaver, and John H. Wilson”and Bret J. Eckert, the Firm’s Government Vice President and CFO, could also be deemed to be individuals within the solicitation of proxies from the Firm’s stockholders in respect of the Merger. As disclosed underneath Safety Possession of Sure Helpful Homeowners, Administrators and Named Government Officers within the Firm’s definitive proxy assertion, filed with the SEC on March 28, 2024 and accessible on the SEC’s EDGAR web site at: https://www.sec.gov/Archives/edgar/information/850460/000110465924040592/0001104659-24-040592-index.html (the 2024 Proxy Assertion), as of March 13, 2024 Mr. Jones beneficially owned 5.36% of the Firm’s frequent inventory and Mr. Eckert beneficially owned 1.55% of the Firm’s frequent inventory. Not one of the different individuals within the solicitation owns in extra of 1 p.c of the Firm’s frequent inventory. Extra detailed details about the possession pursuits of every director and Mr. Eckert could be discovered of their respective SEC filings on Kinds 3, 4, and 5, all of which can be found on the SEC’s web site at www.sec.gov for no cost. In reference to the Merger, the unvested portion of the fairness awards held by Mr. Jones and Mr. Eckert shall be accelerated. The part titled Potential Funds upon Termination or Change-in-Management starting on web page 45 of the 2024 Proxy Assertion (accessible on the SEC’s EDGAR web site at: https://www.sec.gov/Archives/edgar/information/850460/000110465924040592/0001104659-24-040592-index.html) comprises illustrative info on the funds which may be owed to Mr. Jones and Mr. Eckert in a change of management of the Firm. Further info relating to the individuals within the solicitation, together with their direct or oblique pursuits, by safety holdings or in any other case, shall be included within the definitive proxy assertion that the Firm plans to file with the SEC in reference to the solicitation of proxies to approve the Merger.
Ahead-Trying Statements Protected Harbor
The issues on this press launch embody forward-looking statements, together with statements associated to the anticipated timing of the closing of the pending Merger and expectations following the closing of the Merger. Ahead-looking statements could be recognized by phrases akin to: anticipate, intend, plan, aim, search, imagine, venture, estimate, anticipate, technique, future, possible, could and comparable references to future durations. Ahead-looking statements are neither historic info nor assurances of future efficiency. As an alternative, they’re based mostly on present beliefs, expectations and assumptions relating to the way forward for the Firm, our enterprise, future plans and methods, projections, anticipated occasions and developments, the economic system and different future circumstances. As a result of forward-looking statements relate to the longer term, such statements are topic to sure dangers and uncertainties. Ought to a number of of those dangers or uncertainties materialize, precise outcomes could range materially from these anticipated, estimated or projected. Dangers and uncertainties that might trigger precise outcomes to vary materially from these indicated within the forward-looking statements embody: (i) the chance that the Firm could also be unable to acquire the required stockholder approval, antitrust or different regulatory approvals or that different circumstances to consummation of the Merger will not be happy, such that the Merger will not be consummated or that the consummation could also be delayed; (ii) the response of distributors, distributors, different companions and staff to the announcement or consummation of the Merger; (iii) normal macro-economic circumstances, together with dangers related to unforeseeable occasions akin to pandemics, wars and different hostilities, emergencies or different disasters; (iv) dangers related to sure covenants within the Settlement and Plan of Merger, dated April 14, 2024, by and among the many Firm, Father or mother, Applause Merger Sub Inc., a Delaware company and an entirely owned subsidiary of Father or mother (Merger Sub), and solely as supplied in Part 9.12 therein, Prysmian Cables and Techniques USA, LLC, a Delaware restricted legal responsibility firm (Guarantor) (the Merger Settlement) that will restrict or disrupt our present plans and operations; (v) the quantity of the prices, charges, bills and expenses associated to the Merger that will not be recovered if the Merger shouldn’t be consummated for any cause; (vi) the result of any authorized proceedings which may be introduced associated to the Merger; (vii) the prevalence of any occasion, change or different circumstances that might give rise to the termination of the Merger Settlement; and (viii) different dangers and uncertainties described within the Firm’s periodic experiences on Kinds 10-Ok and 10-Q that the Firm information with the SEC. All forward-looking statements communicate solely as of the date hereof. The Firm expressly disclaims any responsibility to replace or revise any of the forward-looking statements to evolve to precise outcomes, besides as required by regulation.
Further Disclosures
The time period EBITDA is utilized by Encore Wire in displays, quarterly convention calls and different cases as applicable. EBITDA is outlined as internet revenue earlier than curiosity, revenue taxes, depreciation and amortization. Encore Wire presents EBITDA as a result of it’s a required part of economic ratios reported by Encore Wire to the Encore Wire’s banks, and can be often utilized by securities analysts, buyers and different events, along with and never in lieu of measures of economic efficiency calculated and offered in accordance with US GAAP, to check to the efficiency of different firms who additionally publicize this info. EBITDA shouldn’t be a measurement of economic efficiency calculated and offered in accordance with US GAAP and shouldn’t be thought-about a substitute for internet revenue as an indicator of the Encore Wire’s working efficiency or some other measure of economic efficiency calculated and offered in accordance with US GAAP.
EBITDA for the fiscal yr 2023 is calculated and reconciled to internet revenue as follows:
In Hundreds |
||
Internet Revenue |
$ |
372,399 |
Revenue Tax Expense |
112,242 |
|
Curiosity Expense |
408 |
|
Depreciation and Amortization |
32,052 |
|
EBITDA |
$ |
517,101 |
1 Equal to $4.2 billion , transformed at 1.08x FX
2 Data supplied by Prysmian and never independently verified by Encore Wire
3 Data supplied by Prysmian and never independently verified by Encore Wire
4 Primarily based on PF EBITDA of €2,102m (Prysmian €1,628m + Encore Wire $517m transformed at 1.08x USD/EUR FX of €479m). Encore Wire financials based mostly on US GAAP.
View supply model on businesswire.com: https://www.businesswire.com/information/residence/20240414157751/en/
For more information:
Encore Wire
Traders
Bret J. Eckert
Government Vice President & CFO
972-562-9473
Media
Joseph Sala, Mahmoud Siddig, Allison Sobel or Lyle Weston
Joele Frank, Wilkinson Brimmer Katcher
212-355-4449
Supply: Encore Wire