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UPDATE 1-Prysmian hints to possible transformational deal
May 10, 2017 / 6:20 PM / 5 months ago

UPDATE 1-Prysmian hints to possible transformational deal

(Recasts to add CEO quotes from the conference call)

By Francesca Landini and Massimo Gaia

MILAN, May 10 (Reuters) - Prysmian, the world’s largest cable maker, is studying several acquisitions including a possible transformational deal, Chief Executive Valerio Battista said on Wednesday.

The group aims to finalise “something” by the end of this year, Battista said during a post-results analysts call, but did not mention any possible target.

Since 2011, when the Milan-based group became the market leader after buying Dutch rival Draka, Prysmian has purchased small or medium-sized companies in high-growth areas.

Acquisitions are seen as a way to grow in a sector that is fragmented and oversupplied.

“It takes two to carry out a (transformational) deal and it is not easy to find targets at reasonable prices nowadays,” Battista said.

“There are ongoing talks, sooner or later we will announce it,” he said, not giving any geographical indication of a potential partner.

Battista said last month that the company, which manufactures cables for industries including telecoms and power, filed offers to potential targets but failed to reach an agreement.

The cable maker expects full year adjusted core profit to come in at between 710 million and 750 million euros from 711 million euros last year.

The guidance disappointed investors who pushed the stock down more than 3.5 percent to 25.93 euros.

The group posted on Wednesday a 3.7 percent drop in first-quarter organic revenues, to 1.85 billion euros, with a rise in sales of telecom cables only partially offsetting a weak performance in the energy project cable business.

The Milan-based group reported a 2.5 percent increase in adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) to 154 million euros in the period. (Editing by Elaine Hardcastle)

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