Details on Prysmian’s Definitive Merger Agreement to Acquire Encore Wire

Prysmian entered into a definitive merger agreement under which it will acquire Encore Wire for $290 per share in cash. According to the Prysmian press release, the transaction represents a premium of approximately +20% to the 30-day volume weighted average share price (VWAP) as of April 12, 2024 and approximately +29% to the 90-day VWAP as of the same date.

At the terms of the transaction, Encore Wire’s implied enterprise value is approximately approximately $4.1 billion.

Encore Wire manufactures a broad range of copper and aluminum electrical wire and cables, supplying power generation and distribution solutions. The Prysmian press release said  Encore Wire’s diversified product portfolio and low-cost of production position it to play a key role in the transition to a more sustainable and reliable energy infrastructure. In fiscal year 2023, Encore Wire delivered revenue of approximately $2.6 billion and EBITDA of $517 million.

According to the Encore Wire press release:

The transaction will allow Prysmian to:

• Increase its exposure to secular growth drivers
• Enhance its exposure to North America
• Leverage Encore Wire’s operational efficiency and best in class service across Prysmian’s portfolio
• Broaden Prysmian’s product offering enabling the combined company to better address customers’ needs in North America

“The acquisition of Encore Wire represents a landmark moment for Prysmian and a strategic and unique opportunity to create value for our shareholders and customers,” said Massimo Battaini, Prysmian designated Group CEO, in the press release. “Through this acquisition, Prysmian will grow its North American presence, enhancing its portfolio and geographic mix, while significantly increasing the exposure to secular growth drivers. We look forward to welcoming the Encore Wire team to Prysmian and benefitting from the combined company’s enhanced product offerings and customer relationships.”

“We are pleased to have reached an agreement that reflects the remarkable value Encore Wire has created with our expansive single-campus model, low-cost production, centralized distribution and product innovation,” added Daniel L. Jones, Encore Wire’s chairman, president and CEO. “This transaction maximizes value for Encore Wire shareholders and provides an attractive premium for their shares. 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, whose dedication and hard work made this transaction possible. We look forward to working with Prysmian to complete this value-enhancing combination and realize the significant benefits that we expect it will bring to all of our stakeholders.”

Following closing of the Transaction, Prysmian expects to maintain a significant presence at Encore Wire’s vertically-integrated, single-site, McKinney, Texas campus.