Encore Wire to be acquired by Prysmian for $290.00 per share in cash

Encore Wire announced that it has entered into a definitive merger agreement under which Prysmian will acquire Encore Wire for $290.00 per share in cash. The transaction represents a premium of approximately 20% to the 30-day volume weighted average share price, or VWAP, as of Friday, April 12 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 EUR 3.9B representing a multiple of 8.2x EV/2023A EBITDA and 6.3x EV/2023A EBITDA including run rate synergies. Following closing of the transaction, Prysmian expects to maintain a significant presence at Encore Wire’s vertically-integrated, single-site, McKinney, Texas campus. Based on pro forma aggregated results for the twelve months ended December, 2023, the combined group would have posted net sales of over EUR 17.7B and adjusted EBITDA of approximately EUR 2.1B. The transaction will be financed through a mix of cash on Prysmian’s balance sheet and newly committed debt facilities. The transaction, which has been unanimously approved by each company’s board of directors and recommended to its shareholders by Encore Wire’s board of directors, is expected to close in the second half of 2024, subject to approval of Encore Wire’s shareholders representing at least a majority of the outstanding shares, regulatory approvals, and other customary closing conditions. Under the terms of the agreement, Encore Wire may solicit alternative acquisition proposals from third parties during a 35-day “go-shop” period following the date of execution of the merger agreement. There can be no assurances that the “go-shop” will result in a superior proposal. Encore Wire does not intend to disclose developments related to the solicitation process until it determines whether such disclosure is appropriate or is otherwise required.