Houston Wire and Cable has agreed to be acquired by OmniCable, a subsidiary of Dot Holdings, which is a family office investment firm specializing in acquiring distribution companies. The price is $5.30 per share which values HWCC at $91 million. The price represents a premium of 39% over yesterday’s closing price.
Houston Wire is a distributor of electrical and mechanical wire and cable with revenues of $300 million. Approximately a third of its revenues come from the energy sector. The company has its head office near the 610/I-10 interchange on the east side.
The company was founded in 1975. It went public in 1987. It was acquired two years later by ALLTEL Corporation. After the business was sold to a PE firm in 1997, the company went public for a second time in 2006.
For some time, the company has been laboring under high debt level of around $75 million of relatively low profitability levels.
The agreement with OmniCable includes a 30-day ‘go-shop’ period, which permits the Board of Directors and advisors to solicit alternative buyers. However, the company expects the deal to close in late May.
The current CFO is Eric Davis. He was appointed to that role in November 2020 after previous CFO Chris Micklas stepped down in June 2020.