Acquisition of AmerCable Holdings Inc. for US$275 million
Paris, February 13, 2012 – Nexans, a worldwide leading expert in the cable industry, makes a major investment in the growing Mining, Oil & Gas and Renewable Energy cable markets.
Nexans has agreed to acquire AmerCable Holdings Inc. ("AmerCable"), the #1 producer of primarily Mining, Marine Oil & Gas and other industrial cables, including Renewable Energy, in North America for US$275m (€211m).
The consideration, which will be payable in cash on completion and funded from existing available cash, represents a multiple of adjusted EBITDA (before copper effects) of 10.0x 2011 EBITDA and 9.5x EBITDA expected for 2012.
Based in El Dorado, Arkansas, AmerCable employs approximately 300 associates and manufactures highly engineered and mission critical cables for harsh environments, specifically for the Mining, Oil & Gas (onshore and offshore) and Renewable Energy industries. AmerCable also provides a range of unique engineering field and support services into these industries. In addition to a leading position in North America (where it makes 77% of its sales), AmerCable has growing operations in China, Latin America and Australia. AmerCable enjoys a large portion of its revenues from recurrent business with key customers.
For the year to 31 December 2011, AmerCable sales revenue totaled around US$270m, which is an annual growth of more than 30%. The company has been consistently producing industry best in class margins due to its attractive product mix.
AmerCable's business compliments Nexans' existing operations in resource cables, providing a new strategic and operational platform in North America.
Commenting on this acquisition, Frédéric Vincent, Nexans CEO said “We are happy to welcome AmerCable associates within our group. The acquisition of AmerCable fits well with Nexans' strategy to develop its Industry division extending its presence in markets with high-growth prospects and above market profitability. The global mining market is expected to benefit from strong global growth, in particular in the coal market in the U.S. and China, and the Oil & Gas market is expected to benefit from increased drilling activity (both onshore and offshore) and increasing well complexity. In particular the growing shift in North America towards unconventional oil and gas development is set to increase demand for AmerCable's products and services. AmerCable's presence in Mining and Oil & Gas will double the size of Nexans' activities in those segments and will be highly complementary to Nexans' existing operations in Offshore and Subsea and for total revenues close to €350m”.
The consideration is subject to customary post-closing adjustments to net indebtedness and working capital levels at closing.
Closing is expected to take place on February 29, 2012.
With energy as the basis of its development, Nexans, worldwide expert in the cable industry, offers an extensive range of cables and cabling systems. The Group is a global player in the infrastructure, industry, building and Local Area Network markets. Nexans addresses a series of market segments: from energy, transport and telecom networks to shipbuilding, oil and gas, nuclear power, automotives, electronics, aeronautics, material handling and automation.
Nexans is a responsible industrial company that regards sustainable development as integral to its global and operational strategy. Continuous innovation in products, solutions and services, employee development and engagement, and the introduction of safe industrial processes with limited environmental impact are among the key initiatives that place Nexans at the core of a sustainable future.
With an industrial presence in 40 countries and commercial activities worldwide, Nexans employs 24,500 people and had sales in 2011 of 7 billion euros. Nexans is listed on NYSE Euronext Paris, compartment A.
- Michel Gédéon
Tel: +33 (0) 1 73 23 85 31
- Carole Vitasse
Tel: + 33 (0)1 73 23 84 56
- Jean-Marc Bouleau
Tel: + 33 (0) 1 73 23 84 61