Encore Wire Corp. (WIRE), a manufacturer of electrical wire and cables, announced Monday that it has entered into a definitive merger agreement to be acquired by Italian cabling solutions provider Prysmian for $290 per share in cash. As per the deal terms, Encore Wire's implied enterprise value is around 3.9 billion euros.
The transaction has been unanimously approved by each company's Board of Directors and recommended to its shareholders by Encore Wire's Board of Directors. The deal is expected to close in the second half of 2024, subject to certain approvals, and other customary closing conditions.
The transaction represents a premium of around 20% to the 30-day volume weighted average share price as of Friday, April 12, and around 29% to the 90-day volume weighted average share price as of the same date.
Under the deal terms, Encore Wire may solicit alternative acquisition proposals from third parties during a 35-day "go-shop" period following the date of execution of the merger agreement.
Daniel Jones, Encore Wire's Chairman, President and Chief Executive Officer, said, "Encore Wire and Prysmian are two highly complementary organizations, and we anticipate a bright future for Encore Wire as part of Prysmian. Furthermore, as part of a larger, global operation, we expect this transaction will bring additional future opportunities for our employees..."
Following closing of the deal, Prysmian expects to maintain a significant presence at Encore Wire's vertically-integrated, single-site, McKinney, Texas campus.
Based on pro forma aggregated results for the twelve months ended December, 2023, the combined group would have posted net sales of over 17.7 billion euros and adjusted EBITDA of approximately 2.1 billion euros.
Massimo Battaini, Prysmian designated Group CEO, said the company expects the acquisition will help it grow its North American presence, enhancing its portfolio and geographic mix, while significantly increasing the exposure to secular growth drivers.
The transaction will be financed through a mix of cash on Prysmian's Balance Sheet and newly committed debt facilities.
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