Thomas & Betts Corp. (T&B), Memphis, Tenn., signed a definitive agreement to acquire AFC Cable Systems, New Bedford, Mass., in a stock-for-stock merger valued at approximately $490 million. The boards of directors of both companies have approved the merger, which awaits only the sanction of the federal government.
AFC will become a wholly owned subsidiary of T&B and will maintain its brand identity. Ralph Papitto, chairman and chief executive officer and largest shareholder of AFC, will continue as chairman and CEO of AFC after the acquisition, and will be nominated as a director of T&B. Following the acquisition, Papitto will be T&B's largest individual shareholder.
Robert Wheeler, president and chief operating officer of AFC, will continue to run the business, and no management or personnel changes are planned, according to T&B.
The acquisition of AFC makes T&B an instant leader in the armored cable market and a strong player in modular wiring. The companies plan to keep their sales channels separate because they serve different segments of the electrical marketplace, says Clyde Moore, president and CEO of T&B.
"The preponderance of the strength of T&B would be more in our shelf-goods products," says Moore. "We've been working hard to get better at products that would be more job and project, system-oriented. Cable tray is a good example... But that's something we've been building from a very small base.
"These guys (at AFC) have an enormous position there, so we see them taking the lead for us in the market where they're strong and T&B staying where we're strong. Therefore, we're all going to need sales forces designed for those specific needs."
T&B can gain more leverage in large-project construction by drawing on AFC's expertise there, particularly in cultivating specifications and tracking a project through its construction cycle, says Moore. The companies will also combine their respective products and expertise to build a systems offering for the premises wiring market, he added.