Pittsburgh, Penn.-based electrical products distributor WESCO International Inc. has announced it is acquiring U.S.-based Anixter International Inc., a distributor of data communications, security, and wire and cable products, for a total transaction value of $4.5 billion. The company plans to fund the acquisition with a mix of debt, equity-content securities, as well as preferred and common stock. The acquisition will consolidate two sizeable distributors and roughly double WESCO's revenue and EBITDA base, while also increasing the company's debt leverage. We expect to assign no equity content to the company's preferred equity issuance based on the proposed terms and will evaluate the terms of the proposed equity-content securities for any equity content to determine the impact on the company's credit ratios.
