The world’s largest electric cable multinational for technology and fiber optics, Prysmian, will buy the American company Encore Wire for around 3.9 billion euros (4.15 billion dollars), as reported by the Italian company this Monday.
Prysmian will finance the transaction through €1.1 billion in cash along with new debt facilities of €3.4 billion. Thus, it is estimated that the operation will be completed in the second half of 2024 after receiving approval from shareholders and regulatory approvals.
The Milan-based group believes that after the integration is completed, it will be able to provide approximately €140 million of synergies in its full operation and before tax effects. The same is estimated for the income for the four years following the completion of the operation.
Earnings per share
Prysmian shareholders expect the acquisition to result in 30% growth from an earnings per share perspective, including the impact of fully operating synergies, and 20% excluding the impact of synergies.
Furthermore, the net financial position after the acquisition will be approximately €5.1 billion ($5.43 billion). In this way, according to the group’s CEO, Massimo Battaini, “The acquisition of Encore Wire represents a milestone for Prysmian and a unique strategic opportunity to create value for our shareholders and customers”, which “will increase its position in North America, plus the geographic and business mix and strengthening the company’s exposure to long-term trends.”
