Prysmian to Purchase Encore Wire at $290.00 Per Share in Cash

Encore Wire (NASDAQ: WIRE) has announced today the finalization of a definitive merger agreement with Prysmian (BIT: PRY), with Prysmian acquiring Encore Wire at $290.00 per share in cash. This transaction marks a significant premium, approximately 20% higher than the 30-day volume weighted average share price (VWAP) as of April 12, 2024, and around 29% higher than the 90-day VWAP as of the same date. The implied Enterprise Value for Encore Wire stands at approximately €3.9 billion, with a multiple of 8.2x EV/2023A EBITDA and 6.3x EV/2023A EBITDA including expected synergies.

Daniel L. Jones, Chairman, President, and CEO of Encore Wire, expressed satisfaction with the agreement, emphasizing the value created by Encore Wire’s business model and innovations. He highlighted the benefits for shareholders and anticipated positive outcomes for both companies’ stakeholders.

Massimo Battaini, designated Group CEO of Prysmian, also underscored the strategic importance of the acquisition, seeing it as an opportunity to expand Prysmian’s presence in North America and enhance its product portfolio. Prysmian aims to leverage Encore Wire’s operational efficiency and strengthen customer relationships through the combined entity.

Post-transaction, Prysmian plans to maintain a significant presence at Encore Wire’s McKinney, Texas campus.

Strategically, the acquisition aligns well with Prysmian’s goals, offering opportunities for growth and synergy realization, including an expected €140 million in run-rate EBITDA synergies within four years of closing.

The combined group’s pro forma financials for the twelve months ending December 2023 indicate net sales of over €17.7 billion and adjusted EBITDA of approximately €2.1 billion. Financing for the transaction will be a mix of cash on Prysmian’s balance sheet (€1.1 billion) and newly committed debt facilities (€3.4 billion).

The Transaction, unanimously approved by both companies’ Boards of Directors, is expected to close in the second half of 2024, subject to customary closing conditions, including shareholder and regulatory approvals.

During a 35-day “go-shop” period following the merger agreement’s execution, Encore Wire may entertain alternative acquisition proposals. However, there is no assurance that such proposals will materialize.

J.P. Morgan Securities LLC serves as the sole financial advisor to Encore Wire, with O’Melveny & Myers LLP acting as legal advisor. Goldman Sachs Bank Europe SE, Succursale Italia, acts as the sole financial advisor to Prysmian, with legal advice provided by Wachtell, Lipton, Rosen & Katz.

Prysmian, a global leader in cabling solutions, sees this acquisition as a strategic move aligning with its business strategy and market objectives.

Encore Wire, known for its range of electrical wire and cables, maintains a focus on cost-efficient production and exceptional customer service from its Texas campus.

For further information on the merger, shareholders are encouraged to review SEC filings and other relevant materials. The Company plans to provide updates as necessary regarding the progress of the merger.

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