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Reps and distributors of wire and cable manufacturers Coleman Cable Inc., Waukegan, Ill., and Southwire Co., Carrollton, Ga., are sitting tight as they await the repercussions of the U.S. electrical market's largest wire and cable merger in many years. The addition of Coleman significantly strengthens Southwire's hand in several product categories, particularly in portable cord and low-voltage cable. For the rest of the distribution channel, the merger may have significant implications as domestic sources of several wire and cable product categories are concentrated in fewer hands.
Under terms of the deal, privately held wire giant Southwire will acquire publicly traded Coleman Cable in a cash deal valued at approximately $786 million, including the assumption of $294 million in net debt. Southwire's tender offer, now underway and expiring at midnight Feb. 3, offers holders of outstanding Coleman shares $26.25 per share in cash. Coleman's board unanimously approved the deal, which the companies expect to close by the end of the first quarter of 2014.
Until the merger is complete, Southwire and Coleman will continue to operate as separate companies. After the deal closes, Coleman's management team will join Southwire. Southwire said it expects to maintain a significant presence in Waukegan.
Coleman Cable's independent rep agencies received a letter this week from the company that said business will proceed as usual until the deal is final. Coleman reps told...