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. Philippi Prietocarrizosa Ferrero DU & Uría advised on antitrust in Chile

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.

Update. Anixter’s shares ceased trading prior to the market open on June 22, 2020.

The Sidley team is led by Irving Rotter (Picture) and includes Gabe Saltarelli, Ram Burshtine, Andrew Stern, David Buck, Karen Kazmerzak, Audry Casusol, Fayzan Bakhtiar, Patrick Harrison, Ben Rosemergy, Laura Barzali and Alan Grinceri.

Wachtell, Lipton, Rosen & Katz advised WESCO with a team including Adam O. Emmerich and John L. Robinson.

Philippi Prietocarrizosa Ferrero DU & Uría advised  Wesco with a team including Ignacia Larraín, Àlvaro Espinosa and Catalina Montero.

Involved fees earner: Álvaro Espinosa – Philippi Prietocarrizosa Ferrero DU & Uría; Ignacio Larraín – Philippi Prietocarrizosa Ferrero DU & Uría; Catalina Montero – Philippi Prietocarrizosa Ferrero DU & Uría; Fayzan Bakhtiar – Sidley Austin LLP; David Buck – Sidley Austin LLP; Ram Burshtine – Sidley Austin LLP; Audry Casusol – Sidley Austin LLP; Alan Grinceri – Sidley Austin LLP; Patrick Harrison – Sidley Austin LLP; Karen Kazmerzak – Sidley Austin LLP; Benjamin Rosemergy – Sidley Austin LLP; Irving Rotter – Sidley Austin LLP; Gabe Saltarelli – Sidley Austin LLP; Andrew Stern – Sidley Austin LLP; Adam Emmerich – Wachtell, Lipton, Rosen & Katz; John Robinson – Wachtell, Lipton, Rosen & Katz;

Law Firms: Philippi Prietocarrizosa Ferrero DU & Uría; Sidley Austin LLP; Wachtell, Lipton, Rosen & Katz;

Clients: Anixter International Inc.; WESCO International Inc;

Author: Ambrogio Visconti