00:00So congratulations. You have been looking for a deal roughly around the four billion dollar size. Massimo. So what's next?
00:07Have you more firepower for more M&A? Yeah, thank you. We definitely have more firepower than four billion dollars.
00:17We mentioned a few months ago a firepower around 10 billion dollars through our treasury shares, the equity raise and
00:24the financing debt. And so we'll be continuing looking for more.
00:28It's important that we remark that what we're looking for is additional expansion of our leadership in some geographies. U
00:37.S. is a priority one. And also we look at the complementarity of the portfolio because cables plus other components
00:44help us enhance our leadership in the market and benefit from the strong growth in the electrification space in U
00:52.S. and also from data center expansion build out.
00:56So we will continue looking at those type of opportunities in the coming months. So very similar companies then to
01:02at core or something slightly in the neighborhood of just electrical manufacturers generally.
01:12similar to at core maybe in similar in different segments. So we have basically four segment of business transmission is
01:20where we own full leadership and we can't buy anyone.
01:24But in electrification in power grid and in digital solution. It is where we can complement our portfolio with a
01:33similar company to at core. So adding something to our cable portfolio so that we can package cables and components
01:41and installation devices all the stuff we're sensing for example to strengthen our leadership in the market.
01:47And you're looking primarily in the U.S. Do you have targets in mind yet?
01:53We are looking in the U.S. We are looking also in other regions. The U.S. has a great
01:58favor from us. I lived there for a long time. I understood how interesting the market is.
02:06How nice is the consolidation of the market on the customer side on the supplier side and now you know
02:13U.S. is exposed to the strongest driver growth the one coming from data center.
02:17And we are unique in data center because we can sell to data center all cables that goes from electrification
02:26of the building power grid to strengthen the grid and also digital solution optical cable that goes inside the building
02:35and connect data center among them.
02:37We are the only one having a possibility and the capability to play in all the value steps of the
02:45supply chain in data center.
02:46Now when it comes to Atcor it's mainly U.S. skewed so 88% of its sales are in the
02:51United States. Do you plan to try to have it expand in the European market or will you keep it
02:58U.S. based?
03:01No, I mean we will keep the U.S. based. We will have also similar synergies to the one in
03:07U.S. and the other geographies. Ator has a footprint, interesting footprint in Australia, in New Zealand, also in UK
03:15and in Europe.
03:16And we will have a similar opportunity to leverage the combination of the two perimeter also outside of the U
03:23.S.
03:24Can you tell us the proportion of debt and equity that you're using in order to make this deal happen?
03:32We are basically raising 20% of the equity of the enterprise value as a new equity or new equity
03:41or maybe using our treasury share.
03:43So it's not so much. It's not that much. And it's needed because we want to maintain our investment grade.
03:51And that's the condition to allow us to maintain it. Some fund, some debt and also equity.
03:57I have to mention that Atcor had been under pressure from an activist investor, Irenic Capital Management.
04:03Did you have or have to have any conversations with Irenic?
04:08No, no, no. This acquisition is being performed through a competitive process. There were other players, U.S. players that
04:17were after this acquisition, this company.
04:19We have nothing to do with the activists. And so we work intensively in the last three months with the
04:27advisor of Atcor to compete against the other competitors.
04:31Now, Atcor has seen a little sales decline in the last couple of years. What's the medium term outlook for
04:38bringing that sales figure back up?
04:43You know, Atcor has gone through a stacking process in 22-23 where the margins has risen to an unprecedented
04:52level, which is what has happened also to our
04:55prism and perimeter in the United States. Then the level of EBITDA margins and revenues have normalized over the last
05:02three years.
05:04We think that now we are at the bottom or they are at the bottom in terms of EBITDA margin
05:08and revenue.
05:08And from now moving onwards, there will be different drivers from the market helping us restore higher profitability and growth
05:17in revenue alongside 150 million of EBITDA coming from synergies.
05:2560%, 60%, 70% of synergies will be extracted from commercial opportunity. So the idea is to package cables with
05:34component and sell more, gain more share of wallet within our distributors,
05:39with the common go to market also Atcor. The rest of the 30% synergies will be basically about organization,
05:47procurement and operations.
05:49So consolidation of footprint in U.S. You know, they have 30 factories Atcor. We also at Prism have 30
05:58factories in U.S.
05:59So with 60 factories, now we sit in U.S. with a very large footprint, able to service properly customers
06:09with short time and fast delivery from every part of the States.
06:14This is a very important strength to be even more competitive in the data center build out opportunity.
Comments