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California Water to acquire SJW
Posted on Friday, 08 June 2018 09:32
California Water Service Group has commenced a previously announced tender offer period to acquire SJW Group for USD 1.90 billion in cash, including the assumption of debt.
The buyer is offering USD 68.25 per share for each item of stock held in the target, representing a premium of 30.2 per cent to the target’s close of USD 52.41 on 3rd April 2018, the last trading day before the original bid was tabled.
SJW has until 3rd August 2018 to make a decision, unless the proposal is extended.
The target manages the San Jose Water Company, which was incorporated in California in 1866 and provides water services to about 1.00 million people in an area spanning around 138 square miles.
Another of the group’s subsidiaries includes SJW Land Company, founded in 1985, that owns commercial buildings and other land, primarily in the San Jose metropolitan area.
SJW also controls SJWTX, which is doing business as Canyon Lake Water Service Company, providing water to 36,000 people in a 240-square mile radius.
Martin Kropelnicki, chief executive of California Water, noted: “We strongly believe that our offer provides SJW stockholders with significantly greater value” and “immediate liquidity for their shares”.
The purchaser is the parent company of Washington Water Service, New Mexico Water Service, Hawaii Water Service and CWS Utility Services, among others.
California Water serve about 2.00 million people across more than 100 communities in California, Washington and Hawaii, among other states.
Shares in the firm closed down slightly yesterday to USD 39.10 apiece, valuing the acqurior at USD 1.88 billion.
According to Zephyr, the M&A database published by Bureau van Dijk, there have been 90 deals targeting water supply and irrigation systems providers announced worldwide since the start of 2018.
The largest of which is California Water’s USD 1.90 billion purchase of SJW Group.
Global Infraco Spain agreed to purchase a 49.0 per cent stake in FCC Aqualia, a Spanish water supply group, for EUR 1.02 billion.
© Zephus Ltd