Wesco International, Inc. · NYSE:WCC
Wesco International — Merger or Acquisition (March 2020)
19 slides from Wesco International's merger presentation, Mar 3, 2020
Slide 1: Merger Update Creating an Industry Leader in Electrical and Data Communications Distribution
Merger Update Creating an Industry Leader in Electrical and Data Communications Distribution
Slide 2: Additional Information and Where to Find It
Additional Information and Where to Find It This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale
Slide 3: Today's Presenters
Today’s Presenters John Engel Dave Schulz President, Chairman and CEO Senior Vice President and CFO WESCO International WESCO International 3
Slide 4: Transformational Combination Creates an Industry Leader in Electrical and Data Communications Distribution
Transformational Combination Creates an Industry Leader in Electrical and Data Communications Distribution Differentiated Scale and Capabilities in Highly ~$17.2 billion of pro forma net sales Fragmented Industry ~$1.1 billion pro forma Adjusted EBITDA, including announced cost synergies Complem
Slide 5: A Leader in Electrical and Data Communications Distribution
A Leader in Electrical and Data Communications Distribution A leader in electrical distribution A leader in data communications, security, and wire & cable distribution $17.2 billion $1,084 million 1 ~50 ~18,900 Pro Forma Pro Forma 2019 Countries Employees 2019 Net Sales Adjusted EBITDA Digital Oper
Slide 6: Differentiated Scale and Capabilities in Highly Fragmented Industry
Differentiated Scale and Capabilities in Highly Fragmented Industry 2019 Net Sales North American Share 1 $17.2bn 7% 6% Sonepar $8.4bn $8.8bn Other 5,000+ Graybar Rest of Rexel Top 200 + Combination increases scale and capabilities 1. Source: Electrical Wholesaling Top 200 Electrical Distributors, 2
Slide 7: Complementary Products, Industries and Geographies Drive Accelerated Growth
Complementary Products, Industries and Geographies Drive Accelerated Growth CIG Utility Power Industrial 15% Solutions 36% 20% Network & Security Solutions Industries Utility Electrical & 53% 16% Electronic Solutions Construction 27% International 33% 5% International 19% Canada 20% Geographies Cana
Slide 8: Complementary Portfolios, Enhanced Capabilities and Strategic Investments Drive Accelerated Growth
Complementary Portfolios, Enhanced Capabilities and Strategic Investments Drive Accelerated Growth ACCELERATED GROWTH • Capitalize on Anixter’s capabilities in wire and cable, data communications and security with WESCO customers • Utilize Anixter’s international footprint to expand with global cust
Slide 9: Significant Cost Synergies Identified with Meaningful Upside
Significant Cost Synergies Identified with Meaningful Upside Cost Synergy Outlook ($mm) Significant Upside 70% of total 30% $200 of total $140 $68 Year One Year Two Year Three Estimated one-time operating costs of ~$140 million over the first three years to capture synergies $200+ Million cost syner
Slide 10: Detailed Execution Plan to Deliver $200+ Million of Announced Cost Synergies
Detailed Execution Plan to Deliver $200+ Million of Announced Cost Synergies Rationalization of branch locations (lease, insurance, local IT and infrastructure, etc.) Reductions in operating expenses, including benefits from duplicative ~2/3 of WESCO and Anixter management functions facilities
Slide 11: Process-Oriented Approach to Drive Integration Execution
Process-Oriented Approach to Drive Integration Execution Flawless Build World Deliver Value OBJECTIVES: Day 1 / Day Class New Capture 100 Execution Company • Ensure uninterrupted operations and • Combined company spend and growth • Implement operating model and design protect the base business syner
Slide 12: Significant Upside Beyond $200+ Million of Announced Cost Synergies
Significant Upside Beyond $200+ Million of Announced Cost Synergies Operational Excellence Growth Opportunities Additional supply chain efficiencies Complementary product lines Further network optimization Cross-selling with customers in all geographies LEAN initiatives across combined platform
Slide 13: Accelerates EPS Growth, Expands Margin and Drives Substantial Earnings Accretion
Accelerates EPS Growth, Expands Margin and Drives Substantial Earnings Accretion Expected Year Three Financial Impact EPS Accretion Including the impact of announced cost synergies, Adjusted EBITDA margin ~ 50 - 60% increases by over 100 bps ~ 40 - 50% <3.5x Delivers 40% to 50% EPS accretion in ye
Slide 14: Substantial Free Cash Flow and Rapid Deleveraging
Substantial Free Cash Flow and Rapid Deleveraging Anticipated deleveraging to be driven Net Debt / Adj. EBITDA through a combination of: 1 + Strong free cash flow generation 2 ~4.5x + Cost savings realization + Earnings growth – Additional capital expenditures to drive synergies 2.0 - 3.5x Strong
Slide 15: Transaction Update and Critical Actions to Closing
Transaction Update and Critical Actions to Closing Regulatory approval process – Initial filings made in all required jurisdictions – Hart-Scott-Rodino waiting period expired on February 26 Anixter Stockholder Meeting scheduled for April 9 Required SEC filings underway We remain on track to close
Slide 16: Transformational Combination Creates an Industry Leader in Electrical and Data Communications Distribution
Transformational Combination Creates an Industry Leader in Electrical and Data Communications Distribution Differentiated Scale and Capabilities in Highly ~$17.2 billion of pro forma net sales Fragmented Industry ~$1.1 billion pro forma Adjusted EBITDA, including announced cost synergies Complem
Slide 17: WESCO
WESCO
Slide 18: Appendix
APPENDIX
Slide 19: Adjusted EBITDA Fiscal Year 2019
Adjusted EBITDA Fiscal Year 2019 Combined Pro WESCO Anixter Forma (In millions) Net income $ 222.1 $ 262.9 $ 485.0 Income taxes 59.9 30.5 90.4 Interest expense 64.2 77.1 141.3 Depreciation and amortization 62.1 72.2 134.3 EBITDA $ 408.3 $ 442.7 $ 851.0 Merger costs 3.1 12.8 15.9 Stock-based compensa
WESCO International — Merger or Acquisition (March 2020) on 6ix