Electrical Equipment Company Encore Wire Gets Wired For Takeover In €3.9B Deal
Portfolio Pulse from Lekha Gupta
Encore Wire Corporation (NASDAQ:WIRE) has agreed to be acquired by Prysmian S.P.A. (OTC:PRYMF) for $290.00 per share in cash, a premium of around 20% to the 30-day VWAP and 29% to the 90-day VWAP as of April 12, 2024. The deal, valued at approximately €3.9 billion, represents multiples of 8.2x and 6.3x EV/2023A EBITDA, with and without run-rate synergies, respectively. The acquisition, expected to close in the second half of 2024, is anticipated to generate €140 million in EBITDA synergies within four years. Investors can gain exposure to Encore Wire through ETFs like MVPA and ZIG.
April 15, 2024 | 11:22 am
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NEUTRAL IMPACT
Prysmian S.P.A. is acquiring Encore Wire Corporation, aiming to enhance its North American presence and product offerings.
While the acquisition is strategically significant for Prysmian, the short-term impact on its stock price is uncertain due to the costs and integration challenges associated with mergers and acquisitions.
CONFIDENCE 80
IMPORTANCE 90
RELEVANCE 80
POSITIVE IMPACT
MVPA ETF offers exposure to Encore Wire, potentially benefiting from the acquisition premium offered by Prysmian.
Given MVPA's exposure to Encore Wire, the ETF might benefit from the acquisition premium, though the extent of impact depends on the ETF's portfolio diversification and the weight of WIRE within it.
CONFIDENCE 70
IMPORTANCE 60
RELEVANCE 50
POSITIVE IMPACT
Encore Wire Corporation is set to be acquired by Prysmian S.P.A. for $290.00 per share, a significant premium over recent trading prices.
The acquisition price represents a substantial premium to Encore Wire's recent trading prices, indicating a positive short-term impact on WIRE's stock price. The premium and the strategic fit with Prysmian suggest a strong positive reception by the market.
CONFIDENCE 90
IMPORTANCE 100
RELEVANCE 100
POSITIVE IMPACT
ZIG ETF, with exposure to Encore Wire, may see positive effects from the acquisition by Prysmian.
ZIG ETF's exposure to Encore Wire suggests potential benefits from the acquisition premium. However, the impact will vary based on the ETF's overall exposure to WIRE and its portfolio strategy.
CONFIDENCE 70
IMPORTANCE 60
RELEVANCE 50