Wesco International, Inc. · NYSE:WCC
Wesco International — Merger or Acquisition (January 2020)
15 slides from Wesco International's merger presentation, Jan 13, 2020
Slide 1: Creating a Premier Electrical and Data Communications Distribution and Supply Chain Services Company
Creating a Premier Electrical and Data Communications Distribution and Supply Chain Services CompanyJanuary 13, 2020
Slide 2: Additional Information and Where to Find It
Additional Information and Where to Find ItThis 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
John EngelChairman, President, and Chief Executive OfficerWESCO International Dave SchulzSenior Vice President and Chief Financial OfficerWESCO International Today’s Presenters
Slide 4: A Premier Electrical and Data Communications Distribution and Supply Chain Services Company
A Premier Electrical and Data Communications Distribution and Supply Chain Services Company Legacy capabilities in data communications, security, and wire & cable distribution Legacy capabilities in electrical distribution Cross Selling to Expanded Customer Base PremierSupply Chain Services Capabili
Slide 5: Transaction Overview
Per Share Consideration Transaction Value Financial Benefits Financing Approvals and Closing Fully committed financing at signing provided by BarclaysAnticipated net leverage at closing of ~4.5x; expected issuance of additional equity and/or equity-content securities to fund a portion of the cash co
Slide 6: Combination Creates a Stronger Enterprise with Enhanced Growth Opportunities
Complementary Industries, Products, and Geographies Increased Scale in Highly Fragmented Industry Substantial Growth and Cost Synergies Create Value Immediately Accretive1 to EPS and EBITDA Margin Transformational Combination of Two Established Distribution Businesses Strong Free Cash Flow and Rapid
Slide 7: Enhances Scale and Global Position with Expanded Product Portfolio
Customer-FocusedComplete SolutionsDeep RelationshipsGlobal CapabilitiesTechnical ExpertiseCulture of Innovation Operations dating to 1957~600,000 products316 warehouses~50 countries~9,300 employees Enhances Scale and Global Position with Expanded Product Portfolio, Customer Base, and Geographic Dive
Slide 8: North American Electrical Distribution Sector Remains Highly Fragmented
North American Electrical Distribution Sector Remains Highly Fragmented Rest of Top 200 Other Rest of Top 200 Other Rest of Top 200 Other North American Shares1 1 Source: Electrical Wholesaling Top 200 Electrical Distributors, 2019 +
Slide 9: Significant Cost Synergies Drive Value Creation
Significant Cost Synergies Drive Value Creation Over $200 Million Run Rate Cost Synergies By End of Year Three 30%of total 70%of total 100%of total Corporate and Administrative~45% Supply Chain/Field Operations~55% Source of Synergies Estimated one-time operating costs of ~$140 million over the firs
Slide 10: Leverage Within Target Range
Leverage Within Target Range 24 Months After Close Net Debt / EBITDA Strength of combined company’s cash flows and significant synergies reduces leverage to within long-term range of 2.0x – 3.5x Anticipated deleveraging to be driven through a combination of:Strong free cash flow generationCost savin
Slide 11: Meets all of WESCO's M&A Objectives
Meets all of WESCO’s M&A Objectives Consolidate Expand Invest 1 2 3 Higher margins than WESCO, net of synergies Rate of return greater than WESCO risk-adjusted cost of capital and Financial Priorities Strategic Objectives Large, core, electrical distributor with significant synergies Adjacent produc
Slide 12: Clear Path to Close
Clear Path to Close Currently anticipate closing during the second or third quarter of 2020Subject to approval of Anixter shareholdersRegulatory approvals in the United States, Canada, and certain other foreign jurisdictions
Slide 13: Combination Creates a Stronger Enterprise with Enhanced Growth Opportunities
Complementary Industries, Products, and Geographies Increased Scale in Highly Fragmented Industry Substantial Growth and Cost Synergies Create Value Immediately Accretive1 to EPS and EBITDA Margin Transformational Combination of Two Established Distribution Businesses Strong Free Cash Flow and Rapid
Slide 14: Appendix
Appendix
Slide 15: Preferred Stock Terms
Security Depositary shares, each representing a 1/1,000th interest in one share of fixed-rate reset cumulative perpetual preferred stock; rate set at issuance based on YTM on the most junior acquisition debt financing plus 3.25% Liquidation $25,000 per share of preferred stock ($25.00 per depositary
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