Carlisle Ends €73M Acquisition Of Draka Fileca Due To Deadline Miss

Carlisle Companies Inc. (CSL) announced the termination of its planned acquisition of Draka Fileca SAS from Prysmian SpA, after failing to receive regulatory approval amid the coronavirus pandemic.

The purchase agreement was ended due to regulatory approval not being received for the transaction prior to the expiration of the parties’ agreed time period to satisfy closing conditions. Last October global cable maker Prysmian said that Carlisle had made an offer to buy its French space and aerospace cables unit Draka Fileca for €73 million ($81.85 million).

Carlisle, which among others is in the business of commercial roofing, is targeting to double annual revenues to $8 billion, expand operating margins to 20%, and generate 15% return on invested capital (ROIC) by 2025.

“While we were enthusiastic about completing the transaction, unfortunately, the COVID-19 pandemic contributed to the delay in timely receiving the necessary regulatory approval,” Carlisle chairman and CEO Chris Koch said. “While disappointed, we remain focused on being the supplier of choice to our North American and European aerospace customers, and committed to expanding our industry leading product offerings and capabilities.”

Koch added that Carlisle Interconnect Technologies (CIT), its global provider of aerospace electrical wire and fiber optic cable technology, will continue to pursue strategic and synergistic M&A opportunities for the company’s aerospace platform.

Shares in Carlisle rose 1.8% to $122.23 on Friday, trimming the year-to-date decline to 24%.

Last week, BMO Capital analyst Joel Tiss upgraded Carlisle to Buy from Hold and raised the stock’s price target to $150 from $135, saying that the “resilience of the company’s current set of businesses seems underrated”.

Tiss noted that Carlisle has $2B-plus of cash and available liquidity to make acquisitions, and views its current valuation as “very reasonable,” especially in comparison with other industrial names.

The stock scores an unanimous 5 Buy ratings from Wall Street analysts. In line with Tiss’ outlook, the $149.60 average price target indicates 22% upside potential in the shares in the coming 12 months. (See Carlisles stock analysis on TipRanks)

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