Prysmian has entered into a definitive merger agreement under which it will acquire Encore Wire, a US producer of copper and aluminium wire and cables used in power and distribution.
The deal will allow Prysmian to enhance its exposure to North America and broaden its product offering enabling the combined company to better address customers’ needs in North America.
The transaction is for $290 per share in cash and Encore Wire’s implied enterprise value is approximately €3.9bn.
Encore Wire’s diversified product portfolio and low-cost of production position it “exceptionally well” to play a key role in the transition to a more sustainable and reliable energy infrastructure, said Prysmian.
In fiscal year 2023, Encore Wire delivered revenue of approximately $2.6bn and EBITDA of $517m.
Massimo Battaini, Prysmian designated Group CEO, 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.
“We look forward to welcoming the Encore Wire team to Prysmian and benefitting from the combined company’s enhanced product offerings and customer relationships.”
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 12 months ended December 2023, the combined group would have posted net sales of over €17.7bn and adjusted EBITDA of approximately €2.1bn.