SJW Group, Connecticut Water Service to Combine In All-Stock Transaction
SJW Group and Connecticut Water Service, Inc. today announced that both companies’ boards of directors have unanimously approved a definitive agreement to combine in an all-stock merger to create the third largest investor-owned water and wastewater utility in the United States, based on pro-forma enterprise value and combined rate base.
Under the terms of the agreement, Connecticut Water shareholders will receive 1.1375 shares of SJW Group common stock for each share of Connecticut Water common stock they own. Following the closing of the transaction, SJW Group shareholders will own approximately 60 percent of the combined company, with Connecticut Water shareholders owning approximately 40 percent, on a fully-diluted basis. All utility and operating subsidiaries of the new company will continue under existing local leadership and brand names – San Jose Water, SJWTX, Inc., SJW Land Company, Connecticut Water Company, Maine Water Company, Avon Water Company and Heritage Village Water Company.
The combined company will have a strong multi-state presence with operations and regulatory relationships in California, Connecticut, Maine and Texas. It will serve more than 1.5 million people with over 700 employees. In addition to expanding its market presence, the increased scale and more diverse geographic footprint of the new organization provides the opportunity for increased investments in service and reliability.
“This transformational merger of equals joins two leading and complementary water utility companies to create significant long-term benefits for shareholders, customers, employees and the communities we serve,” Eric W. Thornburg, President and Chief Executive Officer of SJW Group, said. “The combination will establish a premier organization with substantial opportunities for new investment across a diverse set of geographies and an improved ability to serve our customers.”
Upon closing of the transaction, Eric W. Thornburg will serve as Chairman, President and Chief Executive Officer of the newly-merged company. David C. Benoit will serve as President, New England Region, overseeing the New England operations, including Connecticut Water. In addition, Andrew R. Gere will continue serving as President and Chief Operating Officer of San Jose Water, Thomas Hodge will continue serving as President of SJWTX, Inc. and Richard Knowlton will continue serving as President of Maine Water Company.
The combined company will have headquarters on both the east and west coasts. The west coast headquarters will be located in San Jose, California, and the east coast headquarters will be located in Clinton, Connecticut.
The transaction, which is expected to close by year-end 2018, is subject to all customary closing conditions and approvals, including approval by the Connecticut Public Utilities Regulatory Authority, the Maine Public Utilities Commission and the Federal Communications Commission, along with the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act.
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