General Cable Corporation (the Company)
announced today that it has agreed to acquire Alcan Cable, the wire and cable
business of Rio Tinto plc (Rio Tinto). The purchase price is $185 million in
cash, subject to customary adjustments primarily related to working capital
levels at closing as provided in the definitive purchase agreement. The Company
expects to use its Asset Based Revolving Credit Facility to principally fund
the transaction. The transaction is expected to close in the second half of
2012, subject to receipt of regulatory approval.
Alcan Cable employs approximately 1,050
associates in its aluminum cable manufacturing and distribution facilities
servicing the energy and construction markets in the United States, Canada,
Mexico, and China. In 2011, Alcan Cable reported operating margins in the low
single digit range. On an annual basis, the Company estimates the acquisition
will contribute approximately $650-700 million in revenues at current metal
prices. Over a cycle, Alcan Cable’s operating margin profile is expected to be
consistent with the Company’s existing North American businesses as
manufacturing, logistics, and purchasing synergies are realized. With these
synergies, an improving North American market and an accelerating greenfield
operation in China, the transaction is expected to create shareholder value in
the near term.
“I have long admired Alcan Cable
and their singular and long standing focus on being superb at their craft.
Alcan Cable’s STABILOY(R) and NUAL(R) brand names are the gold standard for
quality, packaging, and service in the North American aluminum cable industry.
In addition, they are highly skilled in aluminum rod manufacturing and have
built a state of the art facility in China that is successfully penetrating the
domestic construction cable market. Alcan Cable’s rich history, like General
Cable’s, exceeds 100 years. We look forward to sharing best practices and
creating fresh career opportunities for the very dedicated and professional
Alcan Cable team,” said Gregory B. Kenny, President and Chief Executive Officer
of General Cable.
Gregory J. Lampert, President and Chief
Executive Officer, General Cable North America, noted that, “The addition
of aluminum construction cables further expands the range of products we offer
to distributors serving electrical and industrial contractors and increases our
capacity to efficiently serve our electric utility customers with transmission
and distribution products.”
“Alcan Cable China has a 430,000
square foot, vertically integrated manufacturing plant in Tianjin, China and
eight regional sales offices. Alcan Cable China is highly complementary to our
two long standing partnerships in China representing a new route to market for
our full range of products. The addition of Alcan Cable Mexico combined with
our existing manufacturing capability in the country further enhances our
ability to service the Mexican market,” said Mathias F. Sandoval,
President and Chief Executive Officer, General Cable Rest of World.
General Cable, a Fortune 500 Company, is
a global leader in the development, design, manufacture, marketing and
distribution of copper, aluminum and fiber optic wire and cable products for
the energy, industrial, specialty, construction and communications markets. For
more information about General Cable products, please contact your local sales
representative or visit our Web site at www.generalcable.com .
Alcan Cable, a 100-year-old leader in
the production of aluminum cable for the utility and building industries,
offers a wide range of bare and insulated conductors to both the utility and
distribution markets, supporting them with highly capable resources to ensure
the highest value application of our products. For more information about Alcan
Cable, please visit the Company’s Web site at www.alcancable.com .
Information from General Cable Corporation news release
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