Moody’s reviews Wesco for downgrade

Moody’s Investors Service said it placed all ratings of Wesco International, Inc., including the Ba3 corporate family rating and Wesco Distribution, Inc.’s B1 senior unsecured rating, under review for downgrade. This action follows the announced merger agreement with Anixter International Inc.

On Jan. 13, Anixter and Wesco announced their respective boards of directors approved a definitive merger agreement to let Wesco acquire Anixter in a transaction valued at $4.5 billion. The transaction is expected to be funded with cash, Wesco stock and perpetual preferred stock and is expected to close in the second or third quarter of 2020.

“The acquisition would consolidate one of Wesco’s competitors in data security and utilities while strengthening its position in Anixter’s core wire and cable segment,” said Griselda Bisono, a vice president, senior analyst at Moody’s, in a press release. “Nonetheless, the combination with Anixter represents a highly transformative acquisition for Wesco, bringing with it integration risk and much higher leverage.”

The rating review will focus on the effect of the transaction on Wesco’s capital structure, liquidity and forward-looking cash flow of the combined company as well as plans to reduce acquisition debt.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.