SJW Group, Connecticut Water Service Announce Merger Of Equals - Quick Facts

(RTTNews) - SJW Group (SJW) and Connecticut Water Service, Inc. (CTWS) announced their boards have unanimously approved a definitive agreement to combine through a merger of equals. 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. 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.

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. The combined company will have a multi-state presence, and regulatory relationships in California, Connecticut, Maine and Texas. It will serve more than 1.5 million people with over 700 employees. Eric Thornburg will serve as Chairman, President and Chief Executive Officer of the newly-merged company.

The combination is expected to be accretive to each company's standalone earnings per share in the first fiscal year post-closing, increasing to mid- to high-single digit accretion in earnings per share over the next couple of years. The combined company is expected to benefit from a robust balance sheet and enhanced financial flexibility, with total assets of $2.4 billion.

The new company is expected to establish a dividend at least equivalent to SJW Group's announced 2018 annual dividend of $1.12 per share. This represents an immediate dividend uplift of approximately 7 percent for Connecticut Water shareholders.