General Cable Corporation
) entered into an agreement to acquire majority stake in Procables
S.A (Procables), a privately owned manufacturer of a broad range of
wire and cable products. The company will acquire 60% share in
Procables for $45 million and the remaining 40% share will be held
by the Sredni Group. The transaction is subjected to regulatory
approval, with closure expected in the second half of 2012.
Procables has two manufacturing facilities, one in Bagota and
the other one in Barranquilla. The products manufactured include
low and medium voltage power cables, building wire, industrial,
communications and bare aluminum conductors as well as operating
copper and aluminum rod mills. Procables generated revenue of $120
million in 2011.
General Cable is engaged in the development, design,
manufacture, marketing and distribution of copper, aluminum and
fiber optic wire and cable products for the energy, industrial,
specialty and communications markets. This acquisition complements
the company's existing product portfolio and is expected to be
accretive in the first full year of operation.
General Cable will benefit from the strong regional commercial
strategy and extensive distribution network of Procables. This,
combined with the technical and operational expertise of General
Cable, will help it to expand its product portfolio and the value
proposition to the Andean Region customers.
This is the second acquisition by the company during 2012.
Earlier, General Cable announced the acquisition of Alcan Cable,
the wire and cable business of
Rio Tinto plc
). The acquisition will be made at $185 million in cash. Alcan
Cable serves the energy and construction markets in the United
States, Canada, Mexico and China. It employs approximately 1,050
associates in its aluminum cable manufacturing and distribution
The combination of Alcan's expertise provides manufacturing,
logistics, and purchasing synergy to the company's North American
businesses. Further, greenfield operation in China is expanding,
and Alcan's presence in these markets provides additional
opportunity. The deal is expected to create shareholder value in
the near term.
General Cable Corporation holds a Zacks #3 Rank (short-term Hold
GENL CABLE CORP (BGC): Free Stock Analysis
RIO TINTO-ADR (RIO): Free Stock Analysis Report
To read this article on Zacks.com click here.