Filing of Certain Prospectuses and Communications in Connection With Business Combination Transactions (425)

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Filed by WESCO International, Inc.
pursuant to Rule 425 under the Securities Act of 1933
Subject Company: Anixter International Inc.
Commission File No.: 333-236307

 

The following are slides from a presentation used by senior management of WESCO International, Inc. (“WESCO”) during its earnings call to announce first quarter 2020 results. The slides are filed herewith pursuant to Rule 425 under the Securities Act of 1933.

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 First Quarter Results Overview  Note: Organic sales growth excludes the impact of acquisitions in the first year of ownership, foreign exchange rates and differences in the number of workdays. See appendix for non-GAAP reconciliations.  First Quarter HighlightsResults were on track with our outlook until mid-MarchWESCO deemed an essential business and all U.S. and Canada branches are operationalConstruction, Utility, and CIG growth in the U.S.; Industrial and Utility growth in CanadaStrong sales in Communications and Security, and Safety Gross margin up 50 basis points sequentiallyEstimated pricing impact was slightly positivePreliminary April sales down ~16%Anixter AcquisitionWaiting period for regulatory approval in the U.S. expired; obtained regulatory clearances from Turkey and RussiaCanada and Mexico regulatory approvals in processObtained Anixter stockholder approvalJoint integration teams have accelerated planningOn track to close in Q2 or Q3  Company well positioned to navigate challenges of COVID-19     2019  2020  Versus PY  Adjustments  Q1 Outlook  Sales  $1,961  $1,969  0.4%    2% - 5%              Gross Profit  $382  $376  (1.6%)      % of sales  19.5%  19.1%  (40) bps                  Adjusted SG&A  $297  $295  (0.6)%  $4.6    % of sales  15.1%  15.0%  (10) bps                  Adjusted Operating Profit  $71  $66  (7.4)%  $4.6  3.4% - 3.6%  % of Sales  3.6%  3.3%  (30) bps                  Effective Tax Rate  21.7%  23.1%  140 bps    ~22%              Adjusted Diluted EPS  $0.93  $0.91  (2.2)%  $0.09   

 

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 Strong Balance Sheet  Covenant Summary          Facility  Maturity  Fixed Charge Covenant  Measurement  Test  Revolver  Sept 2024  1.0 to 1.0  Revolver availability >$60 million  $447 million  AR Facility  Sept 2022  1.0 to 1.0  Liquidity > $100 million  $789 million1  Limited Operating Covenants  Bank Credit Facilities  Mature in 2022 and 2024Low cost LIBOR basedBorrowing bases provide confidence in availability Inventory holds value throughout the cycleDiversified receivables pool with limited concentrationLargest balances with high credit quality customersCollection activities performing consistent with historical levels Bad debt experience consistent with recent quarters  No maximum leverage covenantFixed charge coverage covenant based on liquidity or availability  Strong Liquidity and Free Cash Flow Generation   Liquidity (as of 3/31/20)  Liquidity: $732 million Invested cash: $285 millionRevolver availability: $447 millionUsed $100 million in Q1 to pay CD&R break-up feeAdditional financing anticipated to replace Bridge Commitments for Anixter transaction  1 Balance sheet cash plus borrowing availability  

 

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 Transformational Combination of WESCO and Anixter  Integration Planning ProgressIntegration planning underwayProgress has been rapid and is acceleratingJoint integration teams established with over 500 separate initiatives developed to date Planning process has revealed upside synergy opportunitiesCultural alignment is strong  Transaction MilestonesAgreement announcedObtained committed financing HSR waiting period expired Approval received from Turkey and RussiaAnixter stockholders approved the transaction Canada and Mexico regulatory approvals in process; supplementary information request received in CanadaTender and change of control process for Anixter 2023 and 2025 notes  Remain on track to complete the transaction in Q2 or Q3  Expect to exceed cost, sales growth, and cash generation synergies 

 

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 Accelerates sales growth by more than 100 bpsSignificant cross-selling and international expansion opportunitiesDoubles standalone EPS growth rate Expands Adjusted EBITDA margin 100+ bps and delivers 50 - 60% EPS accretionGenerates annual pro forma free cash flow of ~$600 million  Evolving Secular Trends Benefit WESCO + Anixter  WESCO + Anixter combination benefits from numerous ongoing and attractive growth opportunities  Remote Connectivity Increased reliance on remote communications for work, school, and home   +   Supply Chain Relocation Return of supply chains to the U.S. and Canada  Connected Real Estate Converged infrastructure driven by bandwidth needs  Increased Security Expansion of coverage in metro areas  Secure Networks Secure networks anddata centers  Data Center Capacity Increased bandwidth and power demands  Mobility and Accessibility 24/7/365 connectivity driving bandwidth demand  ElectrificationIncreasing electrification of infrastructure, EVs, and renewables   LED AdoptionMaterial increase in rate of LED adoption   Communications5G build-out, fiber-to-the-x, and proliferation of streaming and mobile data consumption  Utility GridInvestments in grid reliability and hardening  IoT and AutomationIncrease in number of automated processes  Secular Trends Benefitting WESCO and Anixter….  …Contribute to Financial Benefits of the Transformational Combination  Ongoing  Emerging      Estimated Impact in Year Three 

 

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