PITTSBURGH, Jan. 9, 2020 /PRNewswire/ -- WESCO
International, Inc. (NYSE: WCC) ("WESCO"), a leading provider
of electrical, industrial, and communications MRO and OEM products,
construction materials, advanced supply chain management and
logistics services, today confirmed it submitted an improved
proposal to the board of directors of Anixter International
(NYSE: AXE) to acquire Anixter for $100 per share in cash
and stock. The Anixter board has determined WESCO's proposal
represents a "Superior Company Proposal" as defined in Anixter's
merger agreement with Clayton, Dubilier & Rice
(CD&R).
The proposed transaction with WESCO:
- Affords Anixter stockholders consideration per Anixter share of
$70.00 cash, plus a fixed exchange
ratio of 0.2397 shares of WESCO common stock, as in WESCO's prior
proposal, plus $15.89 of a newly
created class of WESCO perpetual preferred stock.
- The common stock consideration would be subject to downside
protection, such that if the average market value of WESCO common
stock prior to closing is between $47.10 per share and $58.88 per share, then the cash consideration
paid at closing would be increased by up to $2.82 per share to ensure that the total
consideration remains at $100 per
Anixter share.
- The perpetual preferred stock will have a dividend rate
represented by a spread of 325bp over the prevailing unsecured
notes to be issued to affect the transaction (the dividend rate of
the perpetual preferred is expected to be approximately 9.25%), and
is subject to reset and a five year non-call feature. It will
be listed on the New York Stock Exchange and is expected to get
equity treatment from the rating agencies.
- Based on the closing price of WESCO's common stock on
January 8, 2020, the total
consideration represents $100.16 per
share.
Based on the number of shares of WESCO and Anixter common stock
currently outstanding, it is anticipated that WESCO stockholders
would own 84%, and Anixter stockholders 16%, of the combined
company. The value opportunity for Anixter's stockholders is at
least $115 per share when taking into
account $100 in nominal consideration
proposed by WESCO, the Anixter stockholders' share of greater than
$200 million of capitalized
synergies, potential multiple re-rating of WESCO's common stock and
the value of the downside protection mechanism.
Mr. John J. Engel, WESCO's Chairman, President and Chief
Executive Officer, said, "WESCO's proposal to acquire Anixter
provides significant immediate value to Anixter's stockholders
along with the opportunity for both companies' stockholders to
benefit in the upside of this transformative combination. We are
pleased that the Anixter board has determined that our latest
proposal represents a Superior Company Proposal and look forward to
executing a merger agreement."
Financing and Leverage
The transaction is not subject to a financing condition. WESCO
has obtained fully committed debt financing from Barclays and
intends to offer a combination of debt, equity and equity-content
securities between signing and closing to fund the required cash
consideration of the transaction. At closing, WESCO estimates that
its pro forma leverage on a net debt to EBITDA basis would be
approximately 4.5x.
Advisors
Barclays is serving as financial advisor to WESCO, and Wachtell,
Lipton, Rosen & Katz is serving as legal advisor.
About WESCO
WESCO International, Inc. (NYSE: WCC), a publicly traded
Fortune 500 holding company headquartered in Pittsburgh, Pennsylvania, is a leading
provider of electrical, industrial, and communications maintenance,
repair and operating (MRO) and original equipment manufacturer
(OEM) products, construction materials, and advanced supply chain
management and logistic services. 2018 annual sales were
approximately $8.2 billion. The company employs approximately
9,300 people, maintains relationships with approximately 30,000
suppliers, and serves approximately 70,000 active customers
worldwide. Customers include commercial and industrial businesses,
contractors, government agencies, institutions, telecommunications
providers, and utilities. WESCO operates 11 fully automated
distribution centers and approximately 500 branches in North America and international locations,
providing a local presence for customers and a global network to
serve multi-location businesses and multi-national
corporations.
Forward-Looking Statements
All statements made herein that are not historical facts should
be considered as "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. Such
statements involve known and unknown risks, uncertainties and other
factors that may cause actual results to differ materially. Such
risks, uncertainties and other factors include, but are not limited
to: adverse economic conditions; the ultimate outcome of any
possible transaction involving WESCO International, Inc. ("WESCO")
and Anixter International Inc. ("Anixter"), including the
possibility that the parties will not agree to pursue a business
combination transaction or that the terms of any definitive
agreement will be materially different from those described herein;
uncertainties as to whether Anixter will cooperate with WESCO
regarding the proposed transaction; WESCO's ability to consummate
the proposed transaction with Anixter; the conditions to the
completion of the proposed transaction, including the receipt of
any required stockholder approvals and any required regulatory
approvals; WESCO's ability to finance the proposed transaction with
Anixter; WESCO's indebtedness, including the substantial
indebtedness WESCO expects to incur in connection with the proposed
transaction with Anixter and the need to generate sufficient cash
flows to service and repay such debt; the possibility that WESCO
may be unable to achieve expected synergies and operating
efficiencies within the expected time-frames or at all and to
successfully integrate Anixter's operations with those of WESCO;
that such integration may be more difficult, time-consuming or
costly than expected; that operating costs, customer loss and
business disruption (including, without limitation, difficulties in
maintaining relationships with employees, customers or suppliers)
may be greater than expected following the proposed transaction or
the public announcement of the proposed transaction; the retention
of certain key employees may be difficult; actions that may be
taken by Clayton, Dubilier & Rice; and other factors described
in detail in the Form 10-K for WESCO for the year
ended December 31, 2018 and any subsequent filings with
the Securities and Exchange Commission (the "SEC"). These
forward-looking statements speak only as of the date of this
communication or as of the date to which they refer, and WESCO
assumes no obligation to update any forward-looking statements as a
result of new information or future events or developments, except
as required by law.
Disclaimer
This document shall not constitute an offer to sell or the
solicitation of an offer to buy any securities, nor shall there be
any sale of securities in any jurisdiction in which the offer,
solicitation or sale would be unlawful prior to the registration or
qualification under the securities laws of any such jurisdiction.
No offering of securities shall be made except by means of a
prospectus meeting the requirements of Section 10 of the U.S.
Securities Act of 1933, as amended.
Additional Information and Where to Find It
This communication does not constitute an offer to buy or
solicitation of an offer to sell any securities. This communication
relates to a proposal that WESCO has made for a business
combination transaction with Anixter. In furtherance of this
proposal and subject to future developments, WESCO (and, if
applicable, Anixter) may file one or more registration statements,
proxy statements, tender offer statements or other documents with
the SEC. This communication is not a substitute for any proxy
statement, registration statement, tender offer statement,
prospectus or other document WESCO and/or Anixter may file with the
SEC in connection with the proposed transaction. INVESTORS AND
SECURITY HOLDERS OF WESCO AND ANIXTER ARE URGED TO READ THE PROXY
STATEMENT(S), REGISTRATION STATEMENT, TENDER OFFER STATEMENT,
PROSPECTUS AND/OR OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY IN
THEIR ENTIRETY IF AND WHEN THEY BECOME AVAILABLE AS THEY WILL
CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Any
definitive proxy statement(s) or prospectus(es) (if and when
available) will be mailed to stockholders of WESCO and/or Anixter,
as applicable. Investors and security holders will be able to
obtain free copies of these documents (if and when available) and
other documents filed with the SEC by WESCO through the web site
maintained by the SEC at www.sec.gov, and by visiting WESCO's
investor relations site at http://wesco.investorroom.com/.
Participants in the Solicitation
This communication is neither a solicitation of a proxy nor a
substitute for any proxy statement or other filings that may be
made with the SEC. Nonetheless, WESCO and its directors and
executive officers and other members of management and employees
may be deemed to be participants in the solicitation of proxies in
respect of the proposed transactions. You can find information
about WESCO's executive officers and directors in WESCO's proxy
statement for its 2019 annual meeting, which was filed with the SEC
on April 15, 2019 and in WESCO's
Annual Report on Form 10-K for the year ended December 31,
2018, which was filed with the SEC on February 27, 2019.
Additional information regarding the interests of such potential
participants will be included in one or more registration
statements, proxy statements, tender offer statements or other
documents filed with the SEC if and when they become available.
These documents (if and when available) may be obtained free of
charge from the SEC's website www.sec.gov, and by visiting
WESCO's investor relations site at
http://wesco.investorroom.com/.
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SOURCE WESCO International, Inc.