Deal combines companies focused on B2B distribution and supply chain solutions.

June 23, 2021

3 Min Read

PITTSBURGH – WESCO International, a leading provider of business-to-business (B2B) distribution, logistics services and supply chain solutions, announced it has completed its merger with Anixter International Inc., creating a premier, industry-leading global B2B distribution and supply chain solutions company.

Upon completion of the merger, Anixter became a wholly owned subsidiary of WESCO International. Anixter's shares ceased trading prior to the market open on June 22, 2020, and each share of Anixter common stock has been converted in the merger into the right to receive $72.82 in cash (without interest), 0.2397 shares of WESCO common stock, and preferred stock consideration consisting of 0.6356 depositary shares, each whole share representing a fractional interest in WESCO's newly created 10.625% Series A Fixed-Rate Reset Cumulative Perpetual Preferred Stock. Based on the 10-day volume weighted average price of WESCO common stock on the NYSE as of the end of trading on June 17, 2020, and valuing the depositary shares based on the value of the underlying preferred stock, total consideration per share of Anixter common stock was $97.93. The newly issued shares of WESCO common and depositary shares will commence trading on the New York Stock Exchange today, June 22, 2020, with the depositary shares trading under ticker symbol WCC PR A.

Compelling Strategic and Financial Rationale

Enhances Scale and Global Position. The combined company generated pro forma 2019 revenue of more than $17 billion and is a leading electrical and data communications distributor in North America. The increased scale enables the combined company to accelerate digitization strategies and provides a platform for growth in attractive international markets.

Broadens and Diversifies Product and Services Portfolio. The combined company has a comprehensive and balanced portfolio that unites WESCO's capabilities in industrial, construction, and utility with Anixter's expertise in data communications, security, and wire and cable. Bringing together the companies' complementary products, services, technologies, and solutions creates significant cross-selling opportunities, strengthening the customer value proposition as well as supplier relationships.

Delivers Substantial Synergies. WESCO expects to realize annualized run-rate cost synergies of over $200 million by the end of year three through efficiencies in corporate and regional overhead, optimization of the branch and distribution center network, and productivity in field operations and the supply chain. In addition, WESCO expects incremental sales growth opportunities to result by cross-selling the companies' complementary product and services offerings to an expanded customer base and capitalizing on the enhanced capabilities across both networks.

Provides Immediate Earnings Accretion and Significant Free Cash Flow Generation. The combination is expected to be accretive to WESCO's earnings in the first full year of ownership and, with the realization of synergies, substantially accretive thereafter. WESCO also expects the transaction to generate significant margin expansion and EPS growth. The combined company offers strong free cash flow generation, supporting continued investments in the business and enabling a return of capital to stockholders in the future.

Ability to Rapidly De-Lever. WESCO will utilize the strength of the combined company's cash flows, including significant synergies, to reduce its leverage quickly and expects to be within its long-term target leverage range of 2.0x to 3.5x within 36 months.

Wesco International

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