WESCO International, Inc. (NYSE: WCC), a leading provider of electrical, industrial, and communications MRO and OEM products, construction materials, advanced supply chain management and logistics services, today confirmed it submitted an improved proposal to the board of directors of Anixter International (NYSE: AXE) to acquire Anixter for $100 per share in cash and stock. The Anixter board has determined WESCO's proposal represents a "Superior Company Proposal" as defined in Anixter's merger agreement with Clayton, Dubilier & Rice (CD&R).

The proposed transaction with WESCO:

• Affords Anixter stockholders consideration per Anixter share of $70.00 cash, plus a fixed exchange ratio of 0.2397 shares of WESCO common stock, as in WESCO's prior proposal, plus $15.89 of a newly created class of WESCO perpetual preferred stock.
• The common stock consideration would be subject to downside protection, such that if the average market value of WESCO common stock prior to closing is between $47.10 per share and $58.88 per share, then the cash consideration paid at closing would be increased by up to $2.82 per share to ensure that the total consideration remains at $100 per Anixter share.
• The perpetual preferred stock will have a dividend rate represented by a spread of 325bp over the prevailing unsecured notes to be issued to affect the transaction (the dividend rate of the perpetual preferred is expected to be approximately 9.25%), and is subject to reset and a five year non-call feature. It will be listed on the New York Stock Exchange and is expected to get equity treatment from the rating agencies.
• Based on the closing price of WESCO's common stock on January 8, 2020, the total consideration represents $100.16 per share.

Based on the number of shares of WESCO and Anixter common stock currently outstanding, it is anticipated that WESCO stockholders would own 84%, and Anixter stockholders 16%, of the combined company. The value opportunity for Anixter's stockholders is at least $115 per share when taking into account $100 in nominal consideration proposed by WESCO, the Anixter stockholders' share of greater than $200 million of capitalized synergies, potential multiple re-rating of WESCO's common stock and the value of the downside protection mechanism.

Mr. John J. Engel, WESCO's Chairman, President and Chief Executive Officer, said, "WESCO's proposal to acquire Anixter provides significant immediate value to Anixter's stockholders along with the opportunity for both companies' stockholders to benefit in the upside of this transformative combination. We are pleased that the Anixter board has determined that our latest proposal represents a Superior Company Proposal and look forward to executing a merger agreement."

Financing and Leverage

The transaction is not subject to a financing condition. WESCO has obtained fully committed debt financing from Barclays and intends to offer a combination of debt, equity and equity-content securities between signing and closing to fund the required cash consideration of the transaction. At closing, WESCO estimates that its pro forma leverage on a net debt to EBITDA basis would be approximately 4.5x.

Advisors

Barclays is serving as financial advisor to WESCO, and Wachtell, Lipton, Rosen & Katz is serving as legal advisor.

About WESCO

WESCO International, Inc. (NYSE: WCC), a publicly traded Fortune 500 holding company headquartered in Pittsburgh, Pennsylvania, is a leading provider of electrical, industrial, and communications maintenance, repair and operating (MRO) and original equipment manufacturer (OEM) products, construction materials, and advanced supply chain management and logistic services. 2018 annual sales were approximately $8.2 billion. The company employs approximately 9,300 people, maintains relationships with approximately 30,000 suppliers, and serves approximately 70,000 active customers worldwide. Customers include commercial and industrial businesses, contractors, government agencies, institutions, telecommunications providers, and utilities. WESCO operates 11 fully automated distribution centers and approximately 500 branches in North America and international locations, providing a local presence for customers and a global network to serve multi-location businesses and multi-national corporations.