Wesco offers $11.75 per share for Industrial Distribution; Platinum Equity has time to sweeten its deal

By Lisa Kerner

Charlotte, N.C., April 17 - Wesco International, Inc. announced it intends to enter into a definitive purchase agreement to acquire Industrial Distribution Group, Inc. for $11.75 per share in a deal with an estimated total enterprise value of $130 million.

The transaction requires Industrial Distribution to terminate its purchase agreement with an affiliate of Platinum Equity, a Wesco news release said.

Wesco said it will fully finance the transaction using existing financing facilities.

According to a statement by Industrial Distribution, its board of directors intends to withdraw its recommendation of the company's pending acquisition by a Platinum Equity affiliate for $10.30 per share in order to accept and recommend Wesco's definitive offer.

Industrial Distribution determined Wesco's offer to be a "superior proposal" under its agreement with Platinum Equity.

Platinum Equity has until Monday to match or top Wesco's offer.

Wesco said its offer expires at 5 p.m. ET on Wednesday.

Luther King Capital Management, which proposed an $11.70-per-share offer to Industrial Distribution on April 4, is permitted to continue its evaluation of the company during this period, according to Industrial Distribution.

"While we do not know whether Platinum Equity or the Luther King companies will decide to offer a superior outcome for our stockholders, it is consistent with our contractual obligations to Platinum Equity and fiduciary duties to our stockholders to provide both of them a reasonable opportunity to do so," Industrial Distribution chairman Richard M. Seigel said in his company's release.

"Industrial Distribution's small site integrated supply services is a great strategic fit for Wesco and extends our capabilities to a broader array of customers seeking comprehensive and cost-effective solutions to their procurement and management of maintenance and indirect items," Wesco senior vice president and chief financial officer Stephen A. Van Oss stated in the Wesco release.

Van Oss said he expects to achieve "significant identified synergies" over the 12 to 24 months following the acquisition's close. The acquisition should be immediately accretive to Wesco's earnings per share, Van Oss noted.

Atlanta-based Industrial Distribution supplies maintenance, repair, operating and production products and services to manufacturers and industrial users in the United States and China.

Wesco is a Pittsburgh-based distributor of electrical construction products and electrical and industrial maintenance, repair and operating supplies and a provider of integrated supply services.

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