Aqua America Inc., the second-largest publicly traded water and wastewater utility based in the United States, will receive an approximately $750 million investment by Canada Pension Plan Investment Board (CPPIB)
The investment marks an important step in obtaining permanent financing for Aqua America’s pending acquisition of Peoples Natural Gas.
The investment is expected to close concurrently with, and contingent upon, the acquisition of Peoples Natural Gas. Through the investment, CPPIB will acquire approximately 21.7 million newly issued shares of Aqua America’s common stock.
Announced October 23, 2018, Aqua America’s acquisition of Peoples Natural Gas will create a new utility infrastructure company that will be positioned to have an impact on improving infrastructure reliability, quality of life, and economic prosperity in the areas it serves.
“CPPIB’s investment in Aqua is an impactful contribution toward closing our acquisition of Peoples,” said Christopher Franklin, chairman and chief executive officer of Aqua America. “This investment positions us well as we look ahead to completing the permanent financing for the Peoples acquisition, and we appreciate CPPIB’s commitment to this transformational endeavor.”
The all-cash Peoples Natural Gas acquisition reflects an enterprise value of $4.275 billion, including the assumption of approximately $1.3 billion of debt. As previously disclosed, the transaction will be financed through an appropriate mix of equity and debt, which will support a strong balance sheet and continued investment-grade credit ratings for the combined business.
“We are pleased to partner with Aqua America to support the revitalization of this key infrastructure,” said Deborah Orida, senior managing director and global head of active equities at CPPIB. “By acquiring Peoples, Aqua America will create a unique platform with a strong management team that is poised for further expansion.”
CPPIB’s investment represents a sizable commitment to the Peoples acquisition financing. Following the transaction’s closing, one CPPIB-designated nominee, to be named at a later date, will be appointed to Aqua’s board of directors.
“The company’s board and management team have an optimistic outlook about Aqua’s business and the strong impact it can have in strengthening infrastructure and taking care of communities,” said Franklin. “CPPIB’s investment is a notable milestone in making this vision a reality.”