PITTSBURGH - Wesco International (NYSE:WCC), a Fortune 500 company and global provider of supply chain solutions, is set to sell its Wesco Integrated Supply (WIS) division to Vallen Distribution, Inc. The deal, valued at $350 million, is part of Wesco's strategy to focus on its core growth areas. WIS, which deals in industrial maintenance, repair, and operations (MRO) integrated supply in North America and Europe, reported net sales of about $784 million in 2023.
The transaction, which is expected to close in the second quarter of this year, is subject to customary regulatory approval. Wesco plans to use the proceeds from the sale to reduce its debt load and to repurchase shares, aiming to strengthen its financial position.
John Engel, Wesco's Chairman, President, and CEO, acknowledged the WIS team's contribution to the company, stating, "Our WIS team has consistently provided exceptional value to our customers over the years. I am very proud of their accomplishments and thank them for their outstanding customer service."
Wesco, headquartered in Pittsburgh, Pennsylvania, has an annual sales figure exceeding $22 billion and employs around 20,000 people worldwide. The company operates nearly 800 branches and sales offices across more than 50 countries, offering a wide range of products and services across various industries, including electrical and electronic solutions, communications, and security, as well as utility and broadband solutions.
The information is based on a press release statement from Wesco International.
InvestingPro Insights
As Wesco International (NYSE:WCC) navigates its strategic divestiture of the WIS division to focus on core growth areas, real-time data from InvestingPro reveals several key financial metrics that could influence investor perception. With a market capitalization of approximately $7.36 billion, Wesco's financial health and market performance are of keen interest to stakeholders. The company's adjusted P/E ratio stands at 9.66, indicating a potentially attractive valuation relative to earnings in the last twelve months as of Q4 2023. Additionally, Wesco's revenue growth in the same period was 4.51%, signaling a steady increase in sales.
Amidst these financial figures, two InvestingPro Tips shed light on the company's market dynamics. Firstly, Wesco is recognized as a prominent player in the Trading Companies & Distributors industry, which may provide a competitive edge in its operational focus post-sale. Secondly, analysts predict that Wesco will be profitable this year, a positive sign for investors looking for sustainable earnings potential.
Investors considering Wesco's stock should note its recent performance, with a one-month price total return of -16.4%, reflecting volatility in the stock price. However, with liquid assets surpassing short-term obligations and a history of profitability over the last twelve months, Wesco appears to be in a solid financial position. For those seeking a more comprehensive analysis, InvestingPro offers additional insights, including a total of 7 InvestingPro Tips for Wesco International, which can be further explored at: https://www.investing.com/pro/WCC. Remember to use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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