Encore Wire Corporation ( WIRE ) inked a definitive deal to be acquired by Prysmian S.P.A. (OTC:PRYMF) for $290.00 per share in cash.

The transaction price represents a premium of around 20% to the 30-day volume weighted average share price (VWAP) as of Friday, April 12, 2024, and about 29% to the 90-day VWAP as of the same date. It represents a premium of over 11% to Friday’s closing price of $260.98.

Encore’s implied Enterprise Value (EV) of around €3.9 billion represents a multiple of 8.2x EV/2023A EBITDA and 6.3x EV/2023A EBITDA, including run-rate synergies.

As per the terms, Encore may solicit alternative acquisition proposals from third parties during a 35-day “go-shop” period following the date of execution of the merger agreement. 

Prysmian expects the acquisition to generate ~€140 million in run-rate EBITDA synergies, projected within four years from closing.

The transaction is expected to close in the second half of 2024, subject to regulatory approvals, and other customary closing conditions.

Based on pro forma aggregated results for the twelve months ended December 2023, the combined company would have posted net sales of over €17.7 billion and adjusted EBITDA of about €2.1 billion.

Daniel L. Jones, Encore Wire’s Chairman, President and CEO, said, “This transaction maximizes value for Encore Wire ( WIRE ) shareholders and provides an attractive premium for their shares. Encore Wire ( WIRE ) and Prysmian are two highly complementary organizations, and we anticipate a bright future for Encore Wire ( WIRE ) as part of Prysmian.”

Massimo Battaini, Prysmian designated Group CEO, commented, “Through this acquisition, Prysmian will grow its North American presence, enhancing its portfolio and geographic mix, while significantly increasing the exposure to secular growth drivers. We look forward to welcoming the Encore Wire ( WIRE ) team to Prysmian and benefitting from the combined company’s enhanced product offerings and customer relationships.”

Investors can gain exposure to the stock via Advisor Managed Portfolios Miller Value Partners Appreciation ETF and The Acquirers Fund ( ZIG ) .

Price Action: WIRE shares traded higher by 8.43% at $282.99 premarket Monday.