Italian cabling business Prysmian has announced it will acquire US-based competitor General Cable in a deal worth $3 billion.
Purchasing the business for $30 a share, including debt and liabilities, is a 35% premium on yesterday’s closing price, and will expand the footprint of Prysmian is several markets, most notably North America.
“The acquisition of General Cable represents a landmark moment for Prysmian Group and a strategic and unique opportunity to create value for our shareholders and customers,” said Valerio Battista, Prysmian Group CEO. “Through the combination of two of the premier companies in the cable industry we will be enhancing our position in the sector, by increasing our presence in North America and expanding our footprint in Europe and South America.”
General Cable has not been in the best shape recently, and announced a strategic review following its financial results in June. At the time, share price was down to roughly $16, after a poor set of results saw the company announce a loss for the quarter. It was believed at the time the review would lead to a sale as the management team sought out ways to ‘maximize shareholder value’.
“This combination is an ideal strategic fit and ensures we are well-positioned to meet the future opportunities and challenges in the dynamic and evolving wire and cable industry,” said Michael McDonnell, General Cable President and CEO.
“Together, we will be able to deliver a robust portfolio of products and services and new product innovation across the full breadth of the wire and cable industry globally. Importantly, Prysmian and General Cable have a shared vision and highly compatible cultures founded on similar values.”
Based on sales for the year ending September 30 2017, the team estimate a combined organization would have annual revenues of €11 billion and adjusted EBITDA of approximately €930 million. A combined organization would also have a handle in 50 countries worldwide, employing roughly 51,000 people. Integration costs are currently being estimated at €220 million.
The transaction will be financed through a mix of new debt, currently available cash and existing credit lines, and is expected to complete in the third quarter of 2018.