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Water Industry Deals and News – April 2018

May 25, 2018

The O’Melveny Monthly Water Report includes select transactions and other items of interest occurring during April 2018. Please contact any member of the O’Melveny Water Practice for additional information on any of these items or any related items.  

Overview

Tracked deal volume in April 2018 centered on acquisitions, with some large financing and share repurchase activity in China. A publicly traded California water utility proposed a $1.4 billion acquisition, and a Connecticut water utility received an acquisition proposal for $750 million. Renewable energy companies with water interests were also active in acquisitions in Australia, California, and Korea. Water testing and technology companies were prevalent among deal activity, with notable acquisitions in China, Luxembourg, and New Zealand.

Mergers & Acquisitions



 


California Water Service Group (NYSE:CWT)

April 4, 2018

California Water Service Group (NYSE:CWT) proposed an indication of interest to acquire SJW Group (NYSE:SJW) for $1.4 billion. Under the terms of the agreement, California Water Service Group will acquire all issued and outstanding shares of SJW Group for $68.25 per share in cash. California Water Service Group shares the same union and would honor all of SJW’s existing collective bargaining agreements. California Water Service Group would not reduce the combined company’s union-represented front-line operations or customer service personnel. California Water Service Group does not anticipate any significant changes to employee compensation or benefits. The transaction is subject to regulatory approval.

California Water Service Group is a publicly traded water utility in the United States, providing high- quality utility services to millions of people in their communities through six subsidiaries: California Water Service (Cal Water), Hawaii Water Service Company, Inc. (Hawaii Water), New Mexico Water Service Company (New Mexico Water), Washington Water Service Company (Washington Water), CWS Utility Services (CWSUS), and HWS Utility Services (HWSUS). Cal Water, Hawaii Water, New Mexico Water, and Washington Water provide regulated water and wastewater utility services, while CWSUS and HWSUS conduct the Company's non-regulated business, which includes providing billing, water quality testing, and water and wastewater system operations and management services to cities and other companies.


   



Eversource Energy (NYSE:ES)

April 5, 2018

Eversource Energy (NYSE:ES) made a non-binding proposal to acquire Connecticut Water Service, Inc. (NasdaqGS:CTWS) for approximately $750 million. Under the terms, Eversource Energy proposes to acquire all the outstanding shares of Connecticut Water Service for $63.5 per share in cash and/or in Eversource common shares at the election of Connecticut Water shareholders. Eversource Energy engages in the generation, transmission, and distribution of natural gas and electricity. The company was founded in 1966, and is headquartered in Springfield, Massachusetts.

CSD Water Service Co., Ltd.


CSD Water Service Co., Ltd.

April 8, 2018

CSD Water Service Co., Ltd. (SHSE:603903) signed an equity transfer agreement to acquire 60% stake in Jiangsu Nanzi Environmental Protection Co., Ltd. from Chen Liwei, Cai Tianming, and Zhang Yongle for approximately $39 million. CSD Water Service offers integrated water services, including wastewater facility investment, water system integration, entrusted management, and technical services.

 

Sukmunho Water Solar Co., Ltd.


Sukmunho Water Solar Co., Ltd.

April 9, 2018

Sukmunho Water Solar Co., Ltd signed a contract to acquire Tonghae 7th Solar Power Plant from Tonghae Co., Ltd. for $1.5 million. Sukmunho Water Solar Co., Ltd. engages in power generation activities. The company was founded in 2018, and is based in Dangjin, South Korea and operates as a subsidiary of Hanwha Total Petrochemical Co., Ltd.


NRG Yield, Inc. (NYSE:NYLD.A)

April 9, 2018

NRG Yield, Inc. (NYSE:NYLD.A), based in Princeton, New Jersey, entered into a definitive agreement to acquire 2.8 megawatt fuel cell power plant project at Tulare Waste Water Treatment Facility in California from FuelCell Energy, Inc. (NasdaqGM:FCEL). NRG Yield, Inc. owns, operates, and acquires contracted renewable and conventional generation and thermal infrastructure assets. The company's assets include natural gas and dual fired, solar and wind generation and distribution.

 

Ahrens Group Pty Ltd.

April 10, 2018

Ahrens Group Pty Ltd. acquired Acer Water Tanks. Ace Water tank has annual revenues of $2 million. Ahrens Group Pty. Ltd., based in Australia, provides construction services, including design, mining services, infrastructure, and steel solutions.

 

Nicor Energy Ventures Company

April 11, 2018

American Water Enterprises, LLC entered into a stock purchase agreement to acquire Nicor Energy Services Company (‘Pivotal’) from Nicor Energy Ventures Company for approximately $370 million. The purchase price comprises a cash payment of $358 million and an estimated $7 million of working capital at closing, subject to adjustment based on the post-closing determination of Pivotal’s working capital.

American Water Works Company, Inc. (NYSE:AWK), the parent of American Water Enterprises, has commenced a registered underwritten offering of 2.32 million shares of its common stock. Nicor Energy Ventures Company, doing business as Central Valley Gas Storage owns and operates natural gas storage facilities. The company was founded in 1994, and is based in Princeton, California.

   



Eurofins Scientific SE (ENXTPA:ERF)

April 12, 2018

Eurofins Scientific SE (ENXTPA:ERF), headquartered in Luxembourg, acquired water and food business from Protec Group. Eurofins, through its subsidiaries, provides various analytical testing services worldwide. It provides food and feed testing, biopharma, genomic, agro-science, consumer product testing, environment testing, clinical diagnostics, agro testing, forensic, materials and engineering science, medical device testing services, as well as chemicals registration, evaluation, and authorization services.


 


Illinois American Water Company

April 13, 2018

Illinois American Water Company signed an asset purchase agreement to acquire Regional Wastewater System from City of Alton for $53.8 million. Illinois American Water provides water and wastewater treatment services to residential homes and businesses around Belleville, Illinois. Illinois American Water operates as a subsidiary of American Water Works Company, Inc.

 

China Water Investment Co., Ltd.


China Water Investment Co., Ltd.

April 13, 2018

China Water Investment Co., Ltd. made an offer to acquire a 10% stake in Qianjiang Water Resources Development Co., Ltd. (SHSE:600283) for approximately $84.8 million. Upon completion, China Water Investment will directly hold 33.55% and indirectly will hold a 39.99% stake in Qianjiang Water Resources. China Water Investment Co., Ltd., Beijing, China, together with its subsidiaries, provides water project investment, operation, and management services. It engages in the development and supply of raw water, inter-region water transfer, water drainage, brackish water desalination, waste water treatment, sludge treatment, power generation by garbage, ecological restoration of water bodies, and garbage power and technological consulting. 

Resonance Industrial Water Infrastructure Fund



Resonance Industrial Water Infrastructure Fund

April 17, 2018

Resonance Industrial Water Infrastructure Fund, a fund managed by Resonance Asset Management Limited signed a heads of terms to acquire a 70% stake in the Goulburn Bioenergy Project and the AJ Bush Bioenergy Project from ReNu Energy Limited (ASX:RNE). As part of the transaction, Resonance Industrial Water Infrastructure Fund (RIWIF) is anticipated to invest up to $4.5 million for the purchase of a 70% stake in the bioenergy assets of ReNu Energy and for funding the expansion for ReNu Energy’s AJ Bush Bioenergy Project located at the rendering facility near Beaudesert, Queensland. Resonance is an alternative asset management firm focused on originating, distributing and managing real asset investment funds for institutional investors.

 


Just Water International Limited (NZSE:JWI)

April 23, 2018

Just Water International Limited (NZSE:JWI) acquired Dolphin Water Products Ltd. for an undisclosed amount and entered into a conditional agreement to acquire an additional 49% stake in HomeTech Ltd. Post transaction Just Water International Limited will hold a 100% stake in HomeTech Ltd. Just Water International Limited supplies water-coolers, drinking water, and filters for the home and office customers in New Zealand. Just Water International Limited was founded in 1987, and is based in Auckland, New Zealand.

Beijing Unibeacon Testing Technology Co., Ltd.


Beijing Unibeacon Testing Technology Co., Ltd.

April 24, 2018

Beijing Watertek Information Technology Co., Ltd. (SZSE:300324) agreed to acquire Beijing Unibeacon Testing Technology Co., Ltd. from Zhuhai Jiuying Investment Center (Limited Partnership) and Xia Xuejiao for $8.6 million.

  Jiangsu Jiangnan Water Co., Ltd.


Jiangsu Jiangnan Water Co., Ltd.

April 25, 2018

Jiangyin Huarui Environmental Development Co., Ltd., Jiangyin Yuecheng Investment Co., Ltd. and Jiangyin Nanzha Street Investment Co., Ltd. agreed to acquire a 52% stake in Jiangyin Jinxiu Jiangnan Environmental Development Co., Ltd. from Jiangsu Jiangnan Water Co., Ltd. (SHSE:601199) for $860,000.

 


Global Water Resources, Inc. (NasdaqGM:GWRS)

April 26, 2018

Located in San Francisco, Global Water Resources, Inc. (NasdaqGM:GWRS) signed a definitive agreement to acquire Turner Ranches Water and Sanitation Company from Ronny and Judy Lopez. Water Resources Engineering provides specialized engineering services to clients in the private and public sectors with the planning, analysis, design, construction, operation, and maintenance of water systems and structures.

   


Public & Private Financings


Xian Sound Sangqing Construction Co., Ltd.

Xian Sound Sangqing Construction Co., Ltd.

April 8, 2018

Xian Sound Sangqing Construction Co., Ltd. announced a private placement of common shares for gross proceeds of $88.6 million. Xian Sound Sangqing Construction provides environmental and facilities services, such as wastewater treatment and landscape and garden construction, planning, designing, and maintenance services. The company was founded in 2018, and is based in Xi'an, China and operates as a subsidiary of Tus-Sound Environmental Resources Co., Ltd.

 

Dongfang Jiaoying Ocean Development Co., Ltd.

Dongfang Jiaoying Ocean Development Co., Ltd.

April 9, 2018

Dongfang Jiaoying Ocean Development Co., Ltd. announced that it has signed a letter of intent for capital increase. The company will receive equity round of funding from existing investor Jiangsu Jiangnan Water Co., Ltd.


 

Beijing Enterprises Water Group Limited

Beijing Enterprises Water Group Limited

April 10, 2018

Beijing Enterprises Water Group Limited (SEHK:371) commenced share repurchases under the program mandated by the shareholders in the Annual General Meeting held on June 1, 2017. As per the mandate, the company is authorized to repurchase up to 10% of its issued share capital. Beijing Enterprises Water, headquartered in Wanchai, Hong Kong, together with its subsidiaries, provides a range of water services and environmental protection services in Mainland China, Singapore, Malaysia, and Portugal.

   

Tay Ninh Water Supply Sewerage Joint Stock Company

Tay Ninh Water Supply Sewerage Joint Stock Company

April 18, 2018

An unknown buyer acquired a 5.38% stake in Tay Ninh Water Supply Sewerage Joint Stock Company, located in Vietnam, from Nguyen Van Hanh.

 

Waters Corporation (NYSE:WAT)

April 20, 2018

Waters Corporation (NYSE:WAT) announces a share repurchase program. Under the program, the company will repurchase up to $3.5 million worth of its outstanding common stock. Waters Corporation, incorporated in 1991, is an analytical instrument manufacturer and designs, manufactures, sells, and services high-performance liquid chromatography, ultra-performance liquid chromatography, and mass spectrometry technology systems and support products. In addition, the company designs, manufactures, sells, and services thermal analysis, rheometry, and calorimetry instruments through its TA product line. The company is also a developer and supplier of software-based products that interface with the company's instruments.

   



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Create Capital Development Limited

Saigon Water Supply Company Limited

November 14, 2017

Saigon Water Supply Company Limited is selling 9,000,000 shares by auction in International Square Trading Service Joint Stock Company. Saigon Water Supply expects to raise at least $9.3 million through the offering.