Houston Wire & Cable Company (NASDAQ: HWCC) (HWCC) and Omni
Cable, LLC (OmniCable) today announced that they have entered into
a definitive agreement under which OmniCable will acquire all
outstanding shares of HWCC common stock for $5.30 per share in an
all-cash transaction valued at $91 million. The price represents a
premium of 39% to HWCC’s unaffected closing price of $3.80 on March
24, 2021 and an 89% premium to the $2.81 average closing price for
the preceding 12-month period. The transaction was unanimously
approved by HWCC’s Board of Directors. All HWCC directors and
officers have agreed to vote their shares, including shares held by
The D3 Family Funds, in favor of the transaction. Such shares
currently represent approximately 19% of the issued and outstanding
shares as of March 24, 2021.
OmniCable is a subsidiary of Dot Holdings Co, which is owned by
Dot Family Holdings, owners and operators of Dot Foods, Inc., the
largest food industry redistributor in North America.
The combined company results in a national wire and cable
redistribution industry leader that will maximize OmniCable’s and
HWCC’s highly complementary businesses, products and national
footprint to better meet the needs of both companies’ customers.
The combined company also will continue HWCC’s fastener
redistribution business. Following the close of the transaction,
each company will retain its own brands and its existing
locations.
James L. Pokluda III, HWCC’s President & CEO, commented,
“HWCC, Vertex and OmniCable are highly respected suppliers in their
respective markets serving electrical and industrial distributors
throughout the U.S. and Canada. This merger creates an outstanding
combination of leading businesses that will be well positioned to
provide increased value and customer service to its redistributor
partners.”
“The HWCC team shares our passion for customer service,” said
Jeff Siegfried, OmniCable founder and vice chairman. “Our shared
central focus on redistribution, logistical expertise, and
unyielding pursuit of perfection for our business partners will
drive both businesses to enhance the value that we bring to the
marketplace. We look forward to continued growth and the shared
learning we know will come from this new relationship.”
Transaction Details
Under the terms of the agreement, HWCC stockholders will receive
$5.30 in cash for each share of common stock they own. In addition,
each stock-based equity award outstanding under the Company’s stock
and deferred compensation plans will be cancelled in exchange for
$5.30. No consideration will be paid for stock options, all of
which have exercise prices above the merger price.
The agreement includes a 30-day "go-shop" period expiring on
April 24, 2021, which permits HWCC’s Board of Directors and
advisors to solicit alternative acquisition proposals from third
parties. HWCC will have the right to terminate the merger agreement
to enter into a superior proposal subject to the terms and
conditions of the merger agreement. There can be no assurance that
this “go-shop” will result in a superior proposal, and HWCC does
not intend to disclose developments with respect to the
solicitation process unless and until it determines such disclosure
is appropriate or is otherwise required.
The transaction is expected to close following HWCC’s Annual
Meeting of Stockholders, scheduled for May 25, 2021, subject to
customary closing conditions, including approval by HWCC
stockholders. Upon completion of the transaction, HWCC common stock
will no longer be listed on any public market.
Fourth Quarter and Full Year 2020 Financial
Results
Separately, later today HWCC intends to file its 2020 Annual
Report on Form 10-K, which will contain its fourth quarter and full
year 2020 financial results. The Form 10-K will be available on the
“Investor Relations” section of the HWCC website, as well as from
the SEC.
Advisors
William Blair & Company, L.L.C. and Johnson Rice &
Company, L.L.C. are serving as financial advisors to HWCC, and
Schiff Hardin LLP is serving as legal counsel. Lewis Rice LLP is
serving as legal counsel to OmniCable.
About HWCC
With 45 years’ experience in the industry, Houston Wire &
Cable Company, an industrial distributor, is a large provider of
wire and cable and fastener products in the U.S. market.
Headquartered in Houston, Texas, the Company has sales and
distribution facilities strategically located throughout the United
States.
Comprehensive value-added services include same-day shipping,
knowledgeable sales staff, inventory management programs,
just-in-time delivery, logistics support, customized online
ordering capabilities and 24/7/365 service.
About OmniCable
Omni Cable, LLC (OmniCable) is a premier redistributor of wire
and cable, electrical products, and value-added services. OmniCable
empowers our industry to be successful by providing an exceptional
experience through operational excellence, accuracy and precision,
and a partnership approach. Stocking locations include
Philadelphia, PA; Atlanta, GA; Boston, MA; Charlotte, NC; Chicago,
IL; Denver, CO; Houston, TX; Los Angeles, CA; San Francisco, CA;
Seattle, WA; St. Louis, MO, Tampa, FL, Cincinnati, OH, and Toronto,
ON.
Additional Information and Where to Find It
This press release relates to the proposed transaction involving
HWCC and OmniCable (the “Transaction”). HWCC intends to file a
proxy statement (the “Proxy Statement”) with the Securities and
Exchange Commission (the “SEC”) in connection with the solicitation
of proxies in connection with the Transaction. This press release
does not constitute a solicitation of any vote or approval, and is
not a substitute for the Proxy Statement or any other document that
HWCC may file with the SEC or send to its stockholders in
connection with the Transaction.
Promptly after filing the definitive Proxy Statement with the
SEC, HWCC will mail the definitive Proxy Statement and a proxy card
to each stockholder entitled to vote at the annual meeting at which
the Transaction will be considered. STOCKHOLDERS ARE URGED TO READ
THE PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS
THERETO) AND ANY OTHER RELEVANT DOCUMENTS THAT HWCC FILES WITH THE
SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE TRANSACTION. Investors and security holders
will be able to obtain the documents (when available) free of
charge at the SEC’s web site, http://www.sec.gov, at HWCC’s
website, www.houwire.com, or by writing to HWCC at Houston Wire
& Cable Company, 10201 North Loop East, Houston, TX 77029,
attention: Corporate Secretary.
Participants in Solicitation
HWCC and its directors and executive officers are participants
in the solicitation of proxies from stockholders in connection with
the Transaction. Information about the directors and executive
officers of HWCC is set forth in the proxy statement for HWCC’s
2020 annual meeting of stockholders, which was filed with the SEC
on March 26, 2020, and in HWCC’s Annual Report on
Form 10-K for the year ended December 31, 2019, which was
filed with the SEC on March 13, 2020, and will be set forth in
the Annual Report on Form 10-K for the year ended December 31,
2020, expected to be filed later today. Other information regarding
the participants in the proxy solicitation and a description of
their direct and indirect interests, by security holdings or
otherwise, will be contained in the Proxy Statement and other
relevant materials to be filed with the SEC in respect of the
proposed transaction when they become available.
Cautionary Note Regarding Forward-Looking
Statements
Forward-looking statements in this press release are made in
reliance upon the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements may
relate to, but are not limited to, information or assumptions about
the duration, extent and impact of the COVID-19 pandemic, our sales
and marketing strategy, sales (including pricing), income,
operating income or gross margin improvements, working capital,
cash flow, interest rates, impact of changes in accounting
standards, future economic performance, management’s plans, goals
and objectives for future operations, performance and growth or the
assumptions relating to any of the forward-looking statements.
These statements can be identified by the fact that they do not
relate strictly to historical or current facts. They use words such
as “aim”, “anticipate”, “believe”, “could”, “estimate”, “expect”,
“intend”, “may”, “plan”, “project”, “should”, “will be”, “will
continue”, “will likely result”, “would” and other words and terms
of similar meaning in conjunction with a discussion of future
operating or financial performance. HWCC cautions that
forward-looking statements are not guarantees because there are
inherent difficulties in predicting future results. Actual results
could differ materially from those expressed or implied in the
forward-looking statements. The factors listed under “Risk Factors”
in the Company’s Annual Report on Form 10-K for the year ended
December 31, 2019 and in subsequent Quarterly Reports on Form 10-Q
provide examples of risks, uncertainties and events that may cause
our actual results to differ materially from the expectations we
describe in our forward-looking statements.
Contact Information
Eric W. Davis
Chief Financial Officer
Direct: 713.609.2177
Fax: 713.609.2168
edavis@houwire.com
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