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WCC

Wesco

$58.09

-0.425 (-0.73%)

, AXE

Anixter

$98.77

-0.02 (-0.02%)

06:34
01/13/20
01/13
06:34
01/13/20
06:34

Wesco to acquire Anixter in $4.5B deal

WESCO (WCC) and Anixter (AXE) announced that their boards of directors have unanimously approved a definitive merger agreement under which WESCO will acquire Anixter in a transaction valued at approximately $4.5B. Anixter's prior agreement to be acquired by Clayton, Dubilier & Rice has been terminated, following CD&R's waiver of its matching rights under the agreement. Under the terms of the agreement, each share of Anixter common stock will be converted into the right to receive $70.00 in cash, 0.2397 shares of WESCO common stock and preferred stock consideration valued at $15.89, based on the value of its liquidation preference. Based on the closing price of WESCO's common stock on January 10, 2020 and the liquidation preference of the WESCO preferred stock consideration, the total consideration represents approximately $100 per Anixter share. Based on transaction structure and the number of shares of WESCO and Anixter common stock currently outstanding, it is anticipated that WESCO stockholders will own 84%, and Anixter stockholders 16%, of the combined company. Under the terms of the merger agreement, WESCO may elect to substitute additional cash consideration to reduce the amount of the preferred stock consideration on a dollar-for-dollar basis based on the value of the liquidation preference of the preferred stock consideration. 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 will be approximately 4.5x. The transaction is subject to Anixter stockholder approval, receipt of regulatory approval in the United States, Canada, and certain other foreign jurisdictions, as well as other customary closing conditions. WESCO and Anixter currently anticipate completing the transaction during the second or third quarter of 2020. Entities associated with Sam Zell, Chairman of the Anixter board, which own approximately 10.8% of the outstanding shares of Anixter common stock, have entered into a voting agreement with WESCO, pursuant to which they have agreed, among other things, to vote their shares of Anixter common stock in favor of the merger.

WCC

Wesco

$58.09

-0.425 (-0.73%)

AXE

Anixter

$98.77

-0.02 (-0.02%)

  • 30

    Jan

  • 04

    Feb

WCC Wesco
$58.09

-0.425 (-0.73%)

01/07/20
OPCO
01/07/20
UPGRADE
OPCO
Outperform
Wesco upgraded to Outperform from Perform at Oppenheimer
Oppenheimer upgraded Wesco to Outperform from Perform.
01/07/20
OPCO
01/07/20
UPGRADE
Target $74
OPCO
Outperform
Oppenheimer upgrades Wesco to Outperform, sees 'even odds' for Anixter deal
Oppenheimer analyst Christopher Glynn upgraded Wesco (WCC) to Outperform from Perform with a $74 price target as he sees "even odds" that that the company can achieve a winning transaction proposal to land Anixter (AXE). His analysis uses an assumed $100 per share price for Anixter and assumes $150M synergies realized by 2023, though he notes his $74 price target only weights a transaction scenario at 50% and gives a 50% weighting to no deal. Given Wesco strategic rationale and domain expertise, Glynn thinks Anixter's board must increasingly consider its proposal and he thinks it is unclear how CD&R's debt funding commitments might scale at higher bid levels, the analyst added.
01/07/20
KEYB
01/07/20
NO CHANGE
KEYB
NN, Inc. could 'benefit the most' from strategic divestiture, says KeyBanc
Against a backdrop of tepid macro data and geopolitical uncertainty, KeyBanc analyst Steve Barger expects relatively weak organic growth in early 2020. As such, the analyst thinks companies will look to drive inorganic growth via acquisitions, or conversely right-size portfolios and balance sheets via divestitures. Broadly, he views Applied Industrial Technologies (AIT), Ametek (AME), Kaman (KAMN), Timken (TKR), TriMas (TRS), and Wesco (WCC) as actively seeking acquisitions, and thinks NN, Inc. (NNBR) could benefit the most from a strategic divestiture.
01/09/20
JEFF
01/09/20
NO CHANGE
Target $66
JEFF
Hold
Wesco in 'do-or-die situation' with Anixter bidding war, says Jefferies
Jefferies analyst Hamzah Mazari believes Wesco (WCC) is in "a do-or-die situation" if its bidding war with Clayton, Dubilier & Rice for Anixter International (AXE) is lost, as the analyst believes Wesco shares are likely to retrace to the $50 level if its takeover attempt is thwarted. Mazari thinks the bidding war likely continues and expects CD&R to come back within the next 5 days with a new bid, adding that the ability to lever up debt should allow the company to offer $100 per share in cash for Anixter. Mazari has a Hold rating and $66 price target on Wesco shares.
AXE Anixter
$98.77

-0.02 (-0.02%)

12/27/19
RAJA
12/27/19
NO CHANGE
RAJA
Strong Buy
Raymond James sees 'several positives' in Wesco revised proposal for Anixter
After Wesco (WCC) announced it had submitted a takeout offer of $93.50 per share in cash and stock for Anixter (AXE), Raymond James analyst Samuel Darkatsh said he had already assumed Wesco would raise its prior $90 offer but he sees "several positive takeaways" from Wesco's announcement compared to his prior assumptions regarding the deal, including higher than expected potential run-rate synergies of "greater than $200 million" and the fact that the transaction is not subject to a Wesco shareholder vote. Wesco seems intent on just acquiring Anixter and not selling itself, added Darkatsh, who called this "unsurprising." The analyst, who also noted that Wesco said its Q4 sales growth is trending above the consensus forecast, keeps a Strong Buy rating on Wesco shares.
01/06/20
LBOW
01/06/20
UPGRADE
Target $70
LBOW
Buy
Longbow upgrades Wesco to Buy amid battle to acquire Anixter
Longbow analyst Chris Dankert upgraded Wesco (WCC) to Buy from Neutral with a $70 price target. The analyst believes the battle to acquire Anixter (AXE) between Wesco and Clayton, Dubilier & Rice will ultimately serve as a positive catalyst for Wesco shares. Should Wesco succeed in acquiring Anixter, operational synergies would drive "substantial" earnings accretion while also easing its competitive pricing pressure, Dankert tells investors in a research note. Further, if Wesco does not succeed in acquiring Anixter, which is the more likely scenario, private equity has established an "appetite for distributors" which supports a takeout of Wesco, adds the analyst.

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