Effort part of permanent financing for
Peoples acquisition
Aqua America Inc. (NYSE:WTR) today announced it has priced
its previously announced public offering of 32,495,667 shares of
its common stock at $34.62 per share and its previously announced
concurrent offering of 12,000,000 of its 6.00% tangible equity
units, with a stated amount of $50. The offerings are part of
securing the permanent financing to close Aqua’s pending
acquisition of Peoples Natural Gas, first announced in October
2018. The offerings are expected to close April 23, 2019, subject
to customary closing conditions.
Aqua has granted the underwriters in the common stock offering a
30-day option to purchase up to an additional 4,874,350 shares
of its common stock. Aqua has also granted the underwriters in the
tangible equity unit offering an option to purchase, within a
13-day period beginning on, and including, the initial issuance
date for the tangible equity units, up to an additional 1,800,000
tangible equity units, solely to cover over-allotments, if any.
The common stock offering and the tangible equity unit offering
are separate public offerings made by means of separate prospectus
supplements and are not contingent on each other or upon the
consummation of Aqua’s acquisition of Peoples Natural Gas.
Each tangible equity unit will consist of a prepaid stock
purchase contract and a senior amortizing note due April 30,
2022. Unless earlier settled or redeemed, each stock purchase
contract will automatically settle on April 30, 2022 (subject to
postponement in limited circumstances) for between 1.1790 and
1.4442 shares of common stock per purchase contract, subject to
adjustment, based upon the applicable market value of the common
stock, as described in the final prospectus supplement relating to
the tangible equity unit offering. Each amortizing note will have
an initial principal amount of $8.62909 and bear interest at a rate
of 3.00% per year. On each January 30, April 30, July 30 and
October 30, commencing on July 30, 2019 and ending April 30, 2022,
Aqua will pay equal quarterly cash installments of $0.75000 per
amortizing note (except for the July 30, 2019 installment payment,
which will be $0.80833 per amortizing note), which will constitute
a payment of interest and a partial repayment of principal, and
which cash payment in the aggregate will be equivalent to 6.00% per
year with respect to each $50 stated amount of tangible equity
units. The amortizing notes will be unsecured senior obligations of
Aqua.
Aqua expects the net proceeds from the common stock offering to
be approximately $1,098.3 million (or $1,263.2 million if the
underwriters for the common stock offering exercise their option to
purchase additional shares of Aqua’s common stock in full) and the
net proceeds from the tangible equity unit offering to be
approximately $585.8 million (or $673.7 million if the underwriters
for the tangible equity unit offering exercise their over-allotment
option in full), in each case after deducting underwriting
discounts and estimated offering expenses. Aqua intends to use the
net proceeds from these offerings, together with the net proceeds
from future debt financings, which may include the issuance of debt
securities and/or borrowings under its bridge facility, and
proceeds from a private placement of common stock, to (1) fund the
acquisition of Peoples Natural Gas, (2) complete the redemption of
approximately $314 million aggregate principal amount of certain of
Aqua’s outstanding notes and (3) pay related costs and
expenses.
If for any reason the acquisition of Peoples Natural Gas is not
consummated, Aqua intends to use the net proceeds from these
offerings for general corporate purposes, which may include the
redemption of certain of Aqua’s outstanding notes or other
securities issued in connection with the planned future debt
financings, repurchases of Aqua’s common stock, debt repayment,
capital expenditures and investments. For example, if for any
reason the acquisition of Peoples Natural Gas is not consummated,
Aqua may redeem all, but not less than all, of the outstanding
purchase contracts that are components of the tangible equity
units, in which case, Aqua would pay a redemption price at that
time in cash or shares of common stock in accordance with the terms
of the purchase contracts. If Aqua elects to redeem the purchase
contracts, it may be required by the holders thereof to repurchase
the amortizing notes at the repurchase price set forth in the
amortizing notes.
Aqua’s common stock is listed on the New York Stock
Exchange under the symbol “WTR,” and Aqua has applied to list the
tangible equity units on the New York Stock
Exchange under the symbol “WTRU.”
Goldman Sachs & Co. LLC, RBC Capital Markets, LLC, Merrill
Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley
& Co. LLC and Wells Fargo Securities, LLC are acting as joint
book-running managers for the common stock offering. RBC Capital
Markets, LLC, Goldman Sachs & Co. LLC, Merrill Lynch, Pierce,
Fenner & Smith Incorporated, Morgan Stanley & Co. LLC and
Wells Fargo Securities, LLC are acting as joint book-running
managers for the tangible equity unit offering.
The offerings of common stock and tangible equity units
(including the component stock purchase contracts and amortizing
notes) are being made pursuant to an effective shelf registration
statement on Form S-3 filed with the Securities and Exchange
Commission.
Each offering may only be made by means of the prospectus
supplement relating to such offering and the accompanying
prospectus. A preliminary prospectus supplement related to each
offering has been filed with the SEC and is available on the SEC’s
website. Copies of the preliminary prospectus supplement for each
offering and the accompanying prospectus can be obtained by
contacting Goldman Sachs & Co. LLC, 200 West Street, New
York, New York 10282, Attention Prospectus Department; RBC
Capital Markets, LLC, 200 Vesey Street, 8th Floor, New York, New
York 10281-8098, Attn: Equity Syndicate.
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy any securities, nor shall there be
any sale of these securities in any state or jurisdiction in which
such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such
state or jurisdiction.
About Aqua America
Aqua America is the second-largest publicly traded water utility
based in the U.S., and serves more than 3 million people in
Pennsylvania, Ohio, North Carolina, Illinois, Texas, New Jersey,
Indiana and Virginia.
Cautionary Statement Regarding Forward-Looking
Statements
This release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995,
including, among others: the terms and timing of additional
offerings or borrowings to be made by Aqua America to fund the
acquisition of Peoples Natural Gas and the anticipated use of
proceeds from these offerings. These statements involve risks and
uncertainties that could cause actual results to differ materially,
including, but not limited to, the ability to price and to satisfy
customary closing conditions with respect to the offerings,
prevailing market conditions, and the impact of general economic,
industry or political conditions in the United States or
internationally. There are important factors that could cause
actual results to differ materially from those expressed or implied
by such forward-looking statements including: general economic
business conditions; changes in regulations or regulatory
treatment, including a change in federal tax policy; availability
and access to capital; the cost of capital; disruptions in the
credit markets; the ability of the company to successfully close
and integrate the acquisition of Peoples Natural Gas; and other
factors discussed in Aqua America’s Annual Report on Form 10-K,
which was filed with the SEC on February 26, 2019 and Aqua
America’s Current Report on Form 8-K/A, which was filed with the
SEC on April 15, 2019. For more information regarding risks and
uncertainties associated with Aqua America's business, please refer
to Aqua America's annual, quarterly and other SEC filings. Aqua
America is not under any obligation - and expressly disclaims any
such obligation - to update or alter its forward-looking statements
whether as a result of new information, future events or
otherwise.
WTRF
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version on businesswire.com: https://www.businesswire.com/news/home/20190418005331/en/
Brian DingerdissenInvestor RelationsO:
610.645.1191BJDingerdissen@AquaAmerica.com
Stacey HajdakMarketing & CommunicationsO:
610.520.6309M: 267.294.1866SMHajdak@AquaAmerica.com
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