In the realm of pre-market trading, Encore Wire Corporation (NASDAQ: WIRE) has witnessed a notable upsurge, boasting a remarkable 9.20% increase to reach $285.00, as per the latest evaluation. This surge in WIRE stocks on US charts coincides with the emergence of news regarding a takeover bid.
Encore Wire (WIRE) has formally revealed that it and Prysmian (BIT: PRY) are involved in a final merger agreement. Prysmian will purchase Encore Wire in accordance with the parameters outlined, for $290.00 per share in cash.
This represents a premium of about 20% over the 30-day volume weighted average share price (VWAP) and around 29% over the 90-day VWAP as of Friday, April 12, 2024. The deal outlines an assumed enterprise value for Encore Wire of about €3.9 billion, with a multiple of 6.3x EV/2023A EBITDA and 8.2x EV/2023A EBITDA, including projected synergies.
This accord underscores the significant value fostered by Encore Wire through its expansive single-campus framework, cost-effective production, centralized distribution, and innovative product spectrum. The alignment between Encore Wire and Prysmian signifies a synergy-rich partnership, paving the way for a promising trajectory within Prysmian’s fold.
Upon the finalization of the transaction, Prysmian envisages maintaining a substantial footprint at Encore Wire’s integrated McKinney, Texas campus, underscoring its commitment to the existing operational infrastructure.
Encore Wire seamlessly aligns with Prysmian’s strategic vision, notably amplifying Prysmian’s exposure to enduring growth catalysts, fortifying its North American foothold, and harnessing Encore Wire’s operational prowess and service excellence across Prysmian’s domain.
Furthermore, the amalgamation is poised to diversify Prysmian’s product portfolio, augmenting its capacity to cater to the nuanced demands of the North American market, while also yielding anticipated EBITDA synergies of approximately €140 million within a four-year timeframe post-closure.
In adherence to the merger agreement, Encore Wire retains the prerogative to entertain alternative acquisition propositions from external entities during a stipulated 35-day “go-shop” period subsequent to the execution date of the merger pact.
