MILAN (Reuters) - Italy's Prysmian has agreed to buy U.S. connectivity device manufacturer Channell Commercial Corp for up to $1.15 billion, the world's largest cable maker said on Tuesday. The deal,
Prysmian Acquires Channell to Boost US Market Presence
MILAN (Reuters) - Italy's Prysmian has agreed to buy U.S. connectivity device manufacturer Channell Commercial Corp for up to $1.15 billion, the world's largest cable maker said on Tuesday.
The deal, which comes less than a year after Prysmian's $4.2 billion acquisition of U.S. firm Encore Wire, expands the Milanese group's footprint in North America, its most profitable market.
The announcement comes as Prysmian prepares to hold an investor day in New York on Wednesday, to outline its long-term strategy and set new financial targets following the Encore acquisition.
It is also expected to provide an update about plans to potentially add a second listing for its shares in New York.
Prysmian said the Channell deal marked its first purchase in a sector that complements its business of digital solution cables, which supports the expansion of data centres and the roll-out of 5G technology in the United States and Europe.
"Thanks to strengthening (our presence) in the connectivity solutions space, we will be best placed to capture growth in the market, which is being boosted by digitalisation and the roll-out of AI," Prysmian Chief Executive Massimo Battaini said in a statement.
Channell's price tag of $950 million could be increased by up to another $200 million if the Texas-based company achieves certain financial results this year, Prysmian said.
Prysmian said it would fund the Channell acquisition through a "balanced mix" of debt and equity instruments, such as hybrid bonds or sales of treasury shares.
Prysmian, which manufactures a wide variety of cables, including for energy transmission and power grids, said it expected to close the deal in the second quarter.
Founded in 1922, Channell employs around 1,000 people and manufactures plastic and metal enclosures, copper wire connectors, fibre-optic cable management systems and thermal management products at three U.S. facilities.
(Reporting by Giulio Piovaccari; Editing by Valentina Za)
