WESCO Announces Sale of Legacy Canada Utility Business to Rexel

Rhea-AI Summary

WESCO International (NYSE: WCC) has sold its legacy WESCO Utility business in Canada to Rexel Canada, fulfilling part of its divestiture commitments following its merger with Anixter International. This transaction aligns with WESCO's agreement with the Canadian Competition Bureau and will generate net proceeds to pay down debt. WESCO's CEO, John Engel, expressed satisfaction with the deal and confirmed the company's ongoing commitment to serve utility customers in Canada through the legacy business acquired from Anixter.

Positive

• Successful completion of the sale of the legacy WESCO Utility business in Canada to Rexel Canada.
• Transaction aligns with commitments made to the Canadian Competition Bureau, promoting regulatory compliance.
• Net proceeds from the sale will be utilized to reduce company debt, improving financial position.

Negative

• Potential risks associated with the transition of associates to Rexel, which may affect operational continuity.
• The sale reduces WESCO's presence in the Canadian utility market, possibly impacting future revenue streams.

WESCO International, Inc. (NYSE: WCC) today announced that it has sold its legacy WESCO Utility business in Canada to Rexel Canada, a wholly owned subsidiary of France’s Rexel Group.

The transaction partially fulfills WESCO’s commitment to divest its legacy Canadian Utility and Datacom businesses in connection with its Consent Agreement with the Canadian Competition Bureau related to WESCO’s merger with Anixter International, which closed on June 22, 2020. Net proceeds will be used to repay indebtedness.

John Engel, Chairman, President, and Chief Executive Officer, said, “We are pleased to complete this transaction with Rexel, which satisfies one of the conditions of our agreement with the Canadian Competition Bureau. This transaction is a highly successful outcome for WESCO. We will support our associates as they transition to Rexel, and we wish them continued success. WESCO is committed to continuing to serve utility customers in Canada, through the legacy business we acquired with Anixter. I look forward to providing further details about this divestiture, as well as the continued integration of WESCO and Anixter, during our fourth quarter earnings call next week.”

About WESCO

WESCO International, Inc. (NYSE: WCC), a publicly traded FORTUNE 500® company headquartered in Pittsburgh, Pennsylvania, is a leading provider of business-to-business distribution, logistics services and supply chain solutions. Pro forma 2019 annual sales were over $17 billion, including Anixter International which it acquired in June 2020. WESCO offers a best-in-class product and services portfolio of Electrical and Electronic Solutions, Communications and Security Solutions, and Utility and Broadband Solutions. The company employs over 18,000 people, maintains relationships with over 30,000 suppliers, and serves more than 150,000 customers worldwide. With nearly 1.5 million products, end-to-end supply chain services, and leading digital capabilities, WESCO provides innovative solutions to meet current customer needs across commercial and industrial businesses, contractors, government agencies, institutions, telecommunications providers, and utilities. WESCO operates nearly 800 branch and warehouse locations in over 50 countries, providing a local presence for customers and a global network to serve multi-location businesses and multi-national corporations.

Forward-Looking Statements

All statements made herein that are not historical facts should be considered as forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially. These statements include, but are not limited to, statements regarding the process to divest the legacy WESCO Utility and Datacom businesses in Canada, including the expected length of the process, the expected benefits and costs of the transaction between WESCO and Anixter International Inc., including anticipated future financial and operating results, synergies, accretion and growth rates, and the combined company's plans, objectives, expectations and intentions, statements that address the combined company's expected future business and financial performance, and other statements identified by words such as "anticipate," "plan," "believe," "estimate," "intend," "expect," "project," "will" and similar words, phrases or expressions. These forward-looking statements are based on current expectations and beliefs of WESCO's management, as well as assumptions made by, and information currently available to, WESCO's management, current market trends and market conditions and involve risks and uncertainties, many of which are outside of WESCO's and WESCO's management's control, and which may cause actual results to differ materially from those contained in forward-looking statements. Accordingly, you should not place undue reliance on such statements.

Those risks, uncertainties and assumptions include the risk of any unexpected costs or expenses resulting from the transaction, the risk of any litigation or post-closing regulatory action relating to the transaction, the risk that the transaction could have an adverse effect on the ability of the combined company to retain customers and retain and hire key personnel and maintain relationships with its suppliers, customers and other business relationships and on its operating results and business generally, the risk that problems may arise in successfully integrating the businesses of the companies or that the combined company could be required to divest one or more businesses, which may result in the combined company not operating as effectively and efficiently as expected, the risk that the combined company may be unable to achieve synergies or other anticipated benefits of the proposed transaction or it may take longer than expected to achieve those synergies or benefits, the risk that the leverage of the company may be higher than anticipated, the impact of natural disasters, health epidemics and other outbreaks, especially the outbreak of COVID-19 since December 2019, which may have a material adverse effect on the combined company's business, results of operations and financial conditions, the risk that the divesture of the legacy WESCO Utility and Datacom businesses in Canada may take longer than expected and other important factors that could cause actual results to differ materially from those projected. All such factors are difficult to predict and are beyond each company's control. Additional factors that could cause results to differ materially from those described above can be found in WESCO's Annual Report on Form 10-K for the fiscal year ended December 31, 2019 and WESCO's other reports filed with the U.S. Securities and Exchange Commission ("SEC").

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FAQ

What is the significance of WCC's sale of its Canadian Utility business?

The sale fulfills WESCO's commitment to the Canadian Competition Bureau, part of the merger with Anixter.

How will WCC utilize the proceeds from the sale to Rexel Canada?

WESCO will use the net proceeds to repay indebtedness, enhancing its financial stability.

When did WCC complete the sale of its Utility business in Canada?

The sale was announced on a recent date, fulfilling regulatory commitments post-merger.

Who is acquiring WCC's Canadian Utility business?

Rexel Canada, a subsidiary of France's Rexel Group, is the acquirer.

What are the implications of this sale for WCC's operations in Canada?

WESCO will continue to serve utility customers through the legacy business acquired from Anixter.