Southwire to purchase Coleman Cable
An agreement was signed Dec. 20.
“But there’s still lots of details to work out,” said Gary Leftwich, Southwire communications manager. “The acquisition still has to undergo regulatory review, but we’re hoping to close sometime in the first quarter of next year.”
A news release reported that the two companies have entered into a merger agreement, with Southwire paying Coleman $26.25 per share, in cash, to acquire the company. The transaction values Coleman at $786 million, including the assumption of $294 million in net debt.
The $26.25 per share represents a premium of 16.6 percent over the closing share price on Oct. 29, the last trading day prior to media reports about a potential transaction. It is a premium of 29.6 percent over the volume weighted average closing price of Coleman’s common stock for 90 days, ending Oct. 29.
Coleman had $914.6 million in revenue in 2012.
Coleman Cable Inc. is a manufacturer and innovator of electrical and electronic wire and cable products for residential and commercial construction, industrial, OEM and consumer applications, with operations in the United States, Honduras and Canada. The company’s broad product offering enables it to provide its customers a single source for many of their wire and cable requirements.
Coleman manufactures the majority of its products in nine domestic production facilities and sells products to more than 8,000 active customers in a wide variety of end markets. It operates three segments: Distribution, OEM, and Engineered Solutions.
“The combination of Southwire and Coleman will create one of the wire and cable industry’s preeminent companies with the ability to provide world-class service to its customers through a more robust and higher-quality offering of products and services, operational excellence and a stronger platform for enhanced product innovation,” said Stuart Thorn, president and chief executive officer of Southwire. “Coleman’s exceptional engineering capabilities across multiple end markets and stellar reputation among customers make it an ideal fit with Southwire. Our shared focus on technology and innovation will allow us to better serve our respective customers, while also saving them time and money.
“Southwire’s outstanding team of motivated, loyal and experienced people is one of our greatest strengths, and we look forward to welcoming the talented and dedicated Coleman team to the Southwire family, where together we will achieve new levels of growth, innovation and service,” Thorn said.
“We’re pleased to announce this transaction, which delivers immediate and certain cash value to our stockholders and supports a strong future for Coleman,” said Gary Yetman, president and chief executive officer of Coleman. “By partnering with Southwire, Coleman will benefit from Southwire’s extraordinary track record of operational success as we continue to execute on our mission of expanding product offerings and sales and exceeding the expectations of our diverse and growing customer base.
“As one of North America’s largest producers of wire and cable, Southwire is a proven industry leader and together we will continue building on the solid momentum our team worked so hard to create,” Yetman said.
Until the merger is complete, both Southwire and Coleman will continue to operate as separate companies. Following the transaction’s closing, Coleman’s management team will join the Southwire organization, and Southwire expects to maintain a significant presence in Waukegan.
Southwire Company is one of North America’s largest wire and cable producers.