Prysmian plans €3.4 billion of debt facilities for Encore purchase

By Sara Rosenberg

New York, April 15 – Prysmian has received a commitment for €3.4 billion of debt facilities to help fund its acquisition of Encore Wire, according to an 8-K filed with the Securities and Exchange Commission on Monday.

Other funds for the transaction will come from cash on hand.

Under the agreement, Encore Wire is being purchased for $290 per share in cash. The transaction has an implied enterprise value of about €3.9 billion.

Based on pro forma aggregated results for the 12 months ended December 2023, the combined group would have posted net sales of over €17.7 billion and adjusted EBITDA of about €2.1 billion.

Pro-forma net debt for the combined group is around €5.1 billion, representing a 2.4x 2023 ND/adjusted EBITDA ratio.

Given the strong cash flow generation of the combined business, further enhanced by the synergies, the company expects to bring the leverage ratio close to Prysmian’s stand-alone 2023 leverage ratio by 2027.

Closing is expected in the second half of this year, subject to Encore Wire shareholder approval, regulatory approvals and other customary conditions.

There is a 35-day “go-shop” period.

Goldman Sachs Bank Europe SE, Succursale Italia is acting as sole financial adviser to Prysmian. J.P. Morgan Securities LLC is acting as sole financial adviser to Encore Wire.

Prysmian is a Milan, Italy-based cabling solutions provider. Encore Wire is a McKinney, Tex.-based manufacturer of copper and aluminum electrical wire and cables.

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