WESCO set to go public, make more acquisitions
WESCO chairman Roy Haley says IPO will help reduce debt and raise capital for acquisitions.
By 04news.qrk -- Industrial Distribution, 4/1/1999
Pittsburgh--WESCO Distribution, Inc. will make a $175 million initial public offering as early as the end of April to reduce debt and position itself for more acquisitions.WESCO, the second largest electrical distributor in North America, filed an IPO registration statement with the Securities and Exchange Commission in March. Chief financial officer Steven Burleson said an IPO is expected by May, pending an SEC review.
"Certainly one of the reasons for doing this is to be in the position to use our stock for acquisition purposes," WESCO chairman and CEO Roy Haley said. "Secondly, by paying down debt with proceeds of the offering, it opens up more opportunities for credit lines as well."
WESCO acquired six distributorships last year with revenues of more than $600 million, making it one of the most active electrical-industrial acquirers of the year. The company reported a revenue increase of 16.6 percent to $3.02 billion and a net loss of $7.7 million for 1998, which it attributes to costs from a re-capitalization last June.
The subsidiary of WESCO International accumulated nearly $52 million in one-time expenses during an investor-led buyout. The Cypress Group, a New York equity investment firm, led the buyout of the former Westinghouse Electric Corp. division. In December of 1997 WESCO also took steps to do an IPO, but it was postponed.
WESCO executives raised their ownership share to 33 percent last spring and as a result of the IPO, Burleson expects they will still own between 25 and 30 percent of the fully loaded stock. In addition, other employees will be eligible to buy up to seven percent of the total offering in a directed share program. Lehman Brothers will manage underwriters for the IPO.
Burleson says that while the IPO would create capacity for growth, "there is no such thing as a planned surge, or slowdown, in acquisition activity. Those are totally seller dependent. We continue to have numerous discussions with various organizations and it is totally dependent on whether the seller has reached" a decision.
Through March, WESCO's acquisitions this year included Statewide Electrical Supply, Inc. in Lafayette, La., and Industrial Electric Supply Co. of Birmingham, Ala.
Without costs from the re-capitalization, net income would have risen by more than $30 million in 1998, the company reported.
WESCO's fourth quarter results saw EBITDA rise 48 percent over the previous year, its 20th consecutive quarter of growth. m
There are no other articles related to this article.Talkback
Related Content
Related Content
Sponsored Links
View All Blogs
