WESCO International’s $4.5 Billion Merger Agreement with Anixter International

Sidley Austin LLP is serving as legal advisor to Anixter in the agreement to create a premier electrical and data communications distribution and supply chain services company. Wachtell, Lipton, Rosen & Katz is advising WESCO.

WESCO International, Inc. (NYSE: WCC), a leading provider of electrical, industrial, and communications MRO and OEM products, construction materials, advanced supply chain management and logistics services, and Anixter International Inc. (NYSE: AXE), a leading global distributor of Network & Security Solutions, Electrical & Electronic Solutions, and Utility Power Solutions, announced that their boards of directors have unanimously approved a definitive merger agreement under which WESCO will acquire Anixter in a transaction valued at approximately $4.5 billion.

Anixter’s prior agreement to be acquired by Clayton, Dubilier & Rice, LLC (“CD&R”) has been terminated, following CD&R’s waiver of its matching rights under the agreement.

Under the terms of the agreement, each share of Anixter common stock will be converted into the right to receive $70.00 in cash, 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 a newly created series of WESCO perpetual preferred stock.

The common stock consideration is subject to downside protection, such that if the average market value of WESCO common stock prior to closing is between $47.10 per share and $58.88 per share, then the cash consideration paid at closing will be increased commensurately by up to $2.82 per share, such that the reduction in value of the WESCO common stock is offset by an increase in the cash consideration within that range. $2.82 per share will also be paid if the value of WESCO stock is below $47.10.

Under the terms of the merger agreement, WESCO may elect to substitute additional cash consideration to reduce the amount of the preferred stock consideration on a dollar-for-dollar basis based on the value of the liquidation preference of the preferred stock consideration.

Barclays is serving as financial advisor to WESCO. Centerview Partners LLC is serving as lead financial advisor and Wells Fargo Securities, LLC is also serving as financial advisor to Anixter.

The Sidley team is led by Irving Rotter (Picture) and includes Gabe Saltarelli, Ram Burshtine, Andrew Stern, David Buck, Karen Kazmerzak, and Audry Casusol.

Involved fees earner: David Buck – Sidley Austin LLP; Ram Burshtine – Sidley Austin LLP; Audry Casusol – Sidley Austin LLP; Karen Kazmerzak – Sidley Austin LLP; Irving Rotter – Sidley Austin LLP; Gabe Saltarelli – Sidley Austin LLP; Andrew Stern – Sidley Austin LLP;

Law Firms: Sidley Austin LLP;

Clients: Anixter International Inc.;

Author: Ambrogio Visconti