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WESCO Announces Private Offering of Notes Due 2025 & 2028
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WESCO International, Inc. (WCC - Free Report) recently announced that its wholly owned subsidiary, WESCO Distribution intends to offer senior unsecured notes aggregating $1.825 billion due 2025 and $1 billion senior notes due 2028.
The company intends to use the transaction proceeds to finance the previously announced merger of WESCO and Anixter International (AXE) via refinancing certain existing indebtedness of Anixter contemplated by the Merger Agreement and debt payments, among others.
Cash Position
At the end of first-quarter 2020, its cash & cash equivalents were $342.6 million, up from $150.9 million in the prior-year comparable period.
The company generated $31.5 million of cash from operations and $15.8 million in free cash flow in the last reported quarter.
We believe that its strong balance sheet will help it capitalize on investment opportunities and pursue strategic acquisitions, further improving prospects. In our view, the senior notes’ offering will bring down the company’s cost of capital, in turn strengthening the balance sheet and supporting growth.
These notes should provide financial flexibility and propel long-term growth.
WESCO is one of the largest players in the highly fragmented distribution market for electrical construction products in North America. Growing industry opportunities and the adoption of supply chain solutions in cloud, data center, and broadband projects remain tailwinds.
This January, WESCO agreed to acquire Anixter for $4.5 billion. The buyout will open immense growth opportunities for WESCO and further bolster presence in the electronics industry. The consolidated company is expected to be a premier electrical and data communications distribution player.
However, increasing competition, contraction in OEM customer base and sluggish manufacturing demand remain major concerns.
During the first quarter, management stated that sales were negatively impacted by the COVID-19 outbreak. However, WESCO stays confident about product portfolio strength, value-added services and end-market momentum.
Long-term earnings growth for Wayfair, eBay, and Inphi is currently projected at 23%, 12.4% and 37.7%, respectively.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2021.
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WESCO Announces Private Offering of Notes Due 2025 & 2028
WESCO International, Inc. (WCC - Free Report) recently announced that its wholly owned subsidiary, WESCO Distribution intends to offer senior unsecured notes aggregating $1.825 billion due 2025 and $1 billion senior notes due 2028.
The company intends to use the transaction proceeds to finance the previously announced merger of WESCO and Anixter International (AXE) via refinancing certain existing indebtedness of Anixter contemplated by the Merger Agreement and debt payments, among others.
Cash Position
At the end of first-quarter 2020, its cash & cash equivalents were $342.6 million, up from $150.9 million in the prior-year comparable period.
The company generated $31.5 million of cash from operations and $15.8 million in free cash flow in the last reported quarter.
We believe that its strong balance sheet will help it capitalize on investment opportunities and pursue strategic acquisitions, further improving prospects. In our view, the senior notes’ offering will bring down the company’s cost of capital, in turn strengthening the balance sheet and supporting growth.
These notes should provide financial flexibility and propel long-term growth.
WESCO International, Inc. Price and Consensus
WESCO International, Inc. price-consensus-chart | WESCO International, Inc. Quote
Bottom Line
WESCO is one of the largest players in the highly fragmented distribution market for electrical construction products in North America. Growing industry opportunities and the adoption of supply chain solutions in cloud, data center, and broadband projects remain tailwinds.
This January, WESCO agreed to acquire Anixter for $4.5 billion. The buyout will open immense growth opportunities for WESCO and further bolster presence in the electronics industry. The consolidated company is expected to be a premier electrical and data communications distribution player.
However, increasing competition, contraction in OEM customer base and sluggish manufacturing demand remain major concerns.
During the first quarter, management stated that sales were negatively impacted by the COVID-19 outbreak. However, WESCO stays confident about product portfolio strength, value-added services and end-market momentum.
Zacks Rank & Stocks to Consider
Amazon currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader technology sector include Wayfair Inc. (W - Free Report) , eBay (EBAY - Free Report) and Inphi Corporation , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Long-term earnings growth for Wayfair, eBay, and Inphi is currently projected at 23%, 12.4% and 37.7%, respectively.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2021.
Click here for the 6 trades >>