Prysmian $3 Billion Acquisition of General Cable Corporation

Goldman Sachs International and Mediobanca – Banca di Credito Finanziario S.p.A acted as financial advisors to Prysmian, Wachtell, Lipton, Rosen & Katz and González Calvillo acted as legal advisors. J.P. Morgan Securities LLC aced as financial advisor to General Cable, Sullivan & Cromwell LLP and Kuri Breña, Sánchez Ugarte y Aznar acted as legal advisors.

Prysmian Group (BIT: PRY) and General Cable Corporation (NYSE: BGC) have entered into a definitive merger agreement under which Prysmian will acquire General Cable for $30.00 per share in cash. The transaction values General Cable at approximately $3 billion, including debt and certain other General Cable liabilities, and represents a premium of approximately 81% to the General Cable closing price of $16.55 per share on July 14, 2017, the last day of trading before General Cable announced its review of strategic alternatives.

The transaction, which has been unanimously approved by each company’s Board of Directors and recommended to its shareholders by General Cable’s Board of Directors, is expected to close by the third quarter of 2018, subject to the approval of General Cable’s shareholders representing at least a majority of the outstanding shares, regulatory approvals, and other customary conditions.

Based on pro forma aggregated results for the twelve months ended September 30, 2017, the combined group would have had sales of over €11 billion and adjusted EBITDA of approximately €930 million. The combined group will be present in more than 50 countries with approximately 31,000 employees.

Prysmian expects the combined group to generate run-rate pre-tax cost synergies of approximately €150 million within five years following closing mainly from procurement, overhead costs savings and manufacturing footprint optimization. One-off integration costs are estimated at approximately €220 million.

The transaction is expected to generate EPS accretion1 in the range of 10-12% for Prysmian shareholders already within the first year following closing (excluding cost synergies and before related implementation costs).

The transaction will be financed through a mix of new debt (for which Prysmian has received lender commitments), cash on hand and existing credit lines, resulting in anticipated pro forma net leverage for the combined group of 2.9x Net Financial Position2 over adj. EBITDA3 LTM 3Q-2017 PF.

Wachtell, Lipton, Rosen & Katz advised Prysmian Group with Adam Emmerich (Picture), Edward Lee, Ilene Knable Gotts, Adam Shapiro, David Anders, Gregory Pessin, Jodi Schwartz, Tijana Dvornic, Franco Castelli, Zachary Podolsky, Sara Spanbock, Jason Kuo, Erica Bonnett, Neil Chatani and Swift Edgar.

In Mexico, González Calvillo advised Cristina Massa, Raúl Paniahua Reyes, Daniel González Contreras.

Sullivan & Cromwell advised General Cable Corporation with

Joseph B. Frumkin and Krishna Veeraraghavan.

In Mexico, Kuri Breña, Sánchez Ugarte y Aznar advised General Cable Corporation with Jesús Sánchez Ugarte, Daniel Kuri Breña Romero de Terreros and Miguel Ángel Vallejo Guerra.

 

Involved fees earner: Cristina Massa – Gonzalez Calvillo Abogados; Jesús Sánchez Ugarte – Kuri Breña Sánchez Ugarte y Aznar; Daniel Kuri Breña Romero de Terreros – Kuri Breña Sánchez Ugarte y Aznar; Miguel Angel Vallejo Guerra – Kuri Breña Sánchez Ugarte y Aznar; Adam Emmerich – Wachtell, Lipton, Rosen & Katz; Edward Lee – Wachtell, Lipton, Rosen & Katz; Jason Kuo – Wachtell, Lipton, Rosen & Katz; Sara Spanbock – Wachtell, Lipton, Rosen & Katz; Zachary Podolsky – Wachtell, Lipton, Rosen & Katz; Ilene Knable Gotts – Wachtell, Lipton, Rosen & Katz; Franco Castelli – Wachtell, Lipton, Rosen & Katz; Adam Shapiro – Wachtell, Lipton, Rosen & Katz; Erica Bonnett – Wachtell, Lipton, Rosen & Katz; David Anders – Wachtell, Lipton, Rosen & Katz; Gregory Pessin – Wachtell, Lipton, Rosen & Katz; Neil Chatani – Wachtell, Lipton, Rosen & Katz; Jodi Schwartz – Wachtell, Lipton, Rosen & Katz; Tijana Dvornic – Wachtell, Lipton, Rosen & Katz; Swift Edgar – Wachtell, Lipton, Rosen & Katz; Joseph Frumkin – Sullivan & Cromwell; Krishna Veeraraghavan – Sullivan & Cromwell;

Law Firms: Gonzalez Calvillo Abogados; Kuri Breña Sánchez Ugarte y Aznar; Wachtell, Lipton, Rosen & Katz; Sullivan & Cromwell;

Clients: Prysmian; General Cable Corporation;

 

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Author: Ambrogio Visconti