SJW Group’s Merger with Connecticut Water Service

J.P. Morgan Securities LLC is serving as financial advisor to SJW Group, and Skadden, Arps, Slate, Meagher & Flom LLP is legal counsel. Wells Fargo Securities, LLC is serving as financial advisor to Connecticut Water, and Sullivan & Cromwell LLP is legal counsel. Simpson Thacher is representing J.P. Morgan Securities LLC as financial advisor to SJW Group

SJW Group (NYSE: SJW) and Connecticut Water Service, Inc. (NASDAQ: CTWS) today announced that both companies’ boards of directors have unanimously approved a definitive agreement to combine through a merger of equals to create the 3rd largest investor-owned water and wastewater utility in the United States, based on pro forma enterprise value and combined rate base.

The combined company will have a strong multi-state presence with high-quality and well-run operations, and constructive regulatory relationships in California, Connecticut, Maine and Texas.  It will serve more than 1.5 million people with over 700 employees.  In addition to expanding its market presence, the increased scale and more diverse geographic footprint of the new organization provide the opportunity for investments in service and reliability that can enhance value for shareholders as well as for customers and communities.  The combined company would have had operating revenue of approximately $496 million and recurring net income of $74 million based on a 2017 pro forma basis.

Under the terms of the agreement, Connecticut Water shareholders will receive 1.1375 shares of SJW Group common stock for each share of Connecticut Water common stock they own, the equivalent of $61.86 per share, or about $750 million in the aggregate, based on SJW Group’s closing stock price as of March 14, 2018, and the agreed upon exchange ratio.  Following closing of the transaction, SJW Group shareholders will own approximately 60 percent of the combined company, and Connecticut Water shareholders will own approximately 40 percent, on a fully diluted basis.  Based on each company’s closing share price as of March 14, 2018 and the 1.1375x transaction exchange ratio, the combined company would have a pro forma $1.9 billion equity value and a $2.6 billion enterprise value.

The transaction, which is expected to close by year-end 2018, is subject to customary closing conditions and approvals, including the approval of the issuance of shares in the transaction by SJW Group stockholders, the approval of Connecticut Water shareholders, the approvals of the Connecticut Public Utilities Regulatory Authority and the Maine Public Utilities Commission, the approval of the Federal Communications Commission, and the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act.  The transaction is not subject to any financing condition.

Simpson Thacher is representing J.P. Morgan Securities LLC as financial advisor to SJW Group with a team including Caroline Gottschalk (Picture) and Della Fok (M&A).

Sullivan & Cromwell advised Connecticut Water Service, Inc. on the deal with a team led by Joseph Frumkin and Audra Cohen, along with Tia Barancik and Lauren Boehmke. Rebecca Coccaro advised on executive compensation and benefits matters.


Involved fees earner: Caroline Gottschalk – Simpson Thacher & Bartlett; Della Fok – Simpson Thacher & Bartlett; Audra Cohen – Sullivan & Cromwell; Joseph Frumkin – Sullivan & Cromwell; Tia Barancik – Sullivan & Cromwell; Lauren Boehmke – Sullivan & Cromwell; Rebecca Coccaro – Sullivan & Cromwell;

Law Firms: Simpson Thacher & Bartlett; Sullivan & Cromwell;

Clients: JP Morgan Securities; Connecticut Water Service, Inc.;



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Author: Ambrogio Visconti