According to the terms of the definitive merger agreement, Prysmian Group will pay $290 per share in cash to shareholders of the Nasdaq-listed Encore Wire, which represents about 20% premium to the 30-day VWAP of the American firm as of 12 April 2024
Encore Wire to be acquired by Prysmian in €3.9bn deal. (Credit: Prysmian Group)
Italian cabling solutions provider Prysmian Group has agreed to acquire copper and aluminium electrical wire and cables manufacturer Encore Wire in a deal that values the latter at about €3.9bn.
According to the terms of the definitive merger agreement, Prysmian Group will pay $290 per share in cash to shareholders of the Nasdaq-listed Encore Wire.
The consideration represents about 20% premium to the 30-day volume weighted average share price (VWAP) of the US-based Encore Wire as of 12 April 2024.
Encore Wire chairman, president, and CEO Daniel Jones said: “This transaction maximises value for Encore Wire shareholders and provides an attractive premium for their shares. Encore Wire and Prysmian are two highly complementary organisations, 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.”
Through the acquisition, Prysmian Group aims to boost its exposure to secular growth drivers as well as improve the company’s presence in North America.
Besides, the cabling solutions provider intends to utilise Encore Wire’s operational efficiency and best in class service across the former’s portfolio.
The deal will also allow the combined company to better address customers’ requirements in North America by expanding Prysmian Group’s product offering.
Prysmian Group is expected to generate approximately €140m in run-rate EBITDA synergies expected within four years from the closing of the transaction.
Prysmian Group designated CEO Massimo Battaini said: “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.
“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.”
Subject to Encore Wire’s shareholders’ approval, regulatory approvals, and other customary conditions, the transaction is anticipated to be completed in the latter half of this year.
The deal has been unanimously approved by each company’s board of directors.
Goldman Sachs Bank Europe SE, Succursale Italia is sole financial adviser to Prysmian Group while Wachtell, Lipton, Rosen & Katz is the company’s legal adviser.
For Encore Wire, J.P. Morgan Securities is serving as financial adviser while O’Melveny & Myers is the legal adviser.
In February this year, Prysmian Group secured a contract worth €1.9bn for the 2GW Eastern Green Link 2 (EGL2) subsea electricity superhighway project between Scotland and England.