Effort part of permanent financing for Peoples acquisition
BRYN MAWR, Pa.--(BUSINESS WIRE)--Apr. 15, 2019--
Aqua America Inc. (NYSE:WTR) today announced it has commenced concurrent
public offerings of approximately $1 billion of its common stock and
$725 million of its tangible equity units, with a stated amount of $50
per unit. The offerings are part of securing the permanent financing to
close Aqua’s acquisition of Peoples Natural Gas, first announced in
October 2018.
Aqua intends to grant the underwriters in the common stock offering a
30-day option to purchase up to an additional $150 million of its common
stock. Aqua also intends to grant 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 $109 million tangible equity units.
The common stock offering and 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 the
previously announced pending acquisition of Peoples Natural Gas.
Each tangible equity unit will consist of a prepaid stock purchase
contract and an amortizing note due April 30, 2022, each issued by Aqua.
Unless earlier settled or redeemed, each stock purchase contract will
automatically settle on April 30, 2022 (subject to postponement in
limited circumstances) for shares of Aqua’s common stock. The amortizing
notes will pay equal quarterly cash installments that will constitute a
payment of interest and a partial repayment of principal. The amortizing
notes will have a final installment payment date of April 30, 2022 and
will be unsecured senior obligations of Aqua.
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, (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 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 America’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 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 of the common stock offering and the tangible equity
units offering, the terms and timing of additional offerings or
borrowings to be made by Aqua America to fund the Acquisition 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; 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
View source version on businesswire.com: https://www.businesswire.com/news/home/20190415005223/en/
Source: Aqua America Inc.
Brian Dingerdissen
Investor Relations
O: 610.645.1191
BJDingerdissen@AquaAmerica.com
Stacey Hajdak
Marketing & Communications
O: 610.520.6309
M:
267.294.1866
SMHajdak@AquaAmerica.com
