Transaction represents execution on Liberty
Utilities' strategy to
expand its regulated utility business in high-quality
jurisdictions
This news release constitutes a "designated news release" for
the purposes of Algonquin Power & Utilities Corp.'s prospectus
supplement dated February 28, 2019 to
its short form base shelf prospectus dated September 18, 2018.
Highlights:
- Liberty Utilities Co., the regulated utility operating
subsidiary of Algonquin Power & Utilities Corp., has entered
into a stock purchase agreement to acquire American Water's
regulated operations in the State of New
York ("New York American Water").
- New York American Water is a regulated water and wastewater
utility serving over 125,000 customer connections across seven
counties in southeastern New
York.
- New York American Water's customer rates are not expected to
be affected by the acquisition.
- Existing local management and operations teams will be
maintained and empowered to continue to deliver the safe and
reliable water utility services that customers expect, with
a commitment by Liberty Utilities to maintain at
least existing employment terms for two years following the
closing.
- Closing of the transaction remains subject to
regulatory approval and other typical closing
conditions.
OAKVILLE, ON, Nov. 20, 2019 /PRNewswire/ - Algonquin Power
& Utilities Corp. (TSX/NYSE:AQN) ("Algonquin") today announced
that Liberty Utilities Co. ("Liberty Utilities"), Algonquin's
regulated utility operating subsidiary, has entered into a stock
purchase agreement with American Water Works Company, Inc. (NYSE:
AWK) ("American Water"), to purchase American Water's regulated
operations in the State of New
York ("New York American Water") for a purchase price of
US$608 million, subject to customary
adjustments.
Headquartered in Merrick, NY,
New York American Water is a regulated water and wastewater utility
serving over 125,000 customer connections across seven counties in
southeastern New York. Operations
include approximately 1,270 miles of water mains and distribution
lines with 98% of customers in Nassau
County on Long Island.
"We are thrilled to expand our customer base in the great state
of New York," said Ian Robertson, Chief Executive Officer of
Algonquin. "New York State has
demonstrated a commitment to ensuring regulated utilities put their
customers first. We believe the state's vision aligns with our
customer-driven focus. We have experience in multiple states as a
water utility operator and are known for our commitment to
excellence. We are committed to partnering with our regulator and
other state officials to support the affordability of water
services, including reducing the burden of local taxes on New York
American Water's customers, which can account for more than half of
their monthly bills. We are also excited to welcome New York
American Water's employees to our Liberty Utilities team."
Continuing Commitment to Our Communities, Customers and
Employees
Liberty Utilities will work closely with American Water, New
York American Water, and the New York Public Service Commission to
ensure a smooth transition. Under Liberty Utilities' local
and responsive operating model, existing local management and
operations teams will be maintained and empowered to continue to
deliver the safe and reliable service that customers expect, with a
commitment by Liberty Utilities to maintain at least existing
employment terms for two years following the closing. Customers
should not expect any impact on rates as a result of the
acquisition. Liberty Utilities is committed to continuing to invest
in the water system to improve water quality, customer education on
conservation and community outreach.
"This was a very difficult decision for American Water, as we
have had the privilege of serving customers and communities in
New York for more than 130 years,"
said Susan Story, president and CEO
of American Water. "After careful and comprehensive analysis, we
believe it is in the best interest of our customers in New York to sell to Liberty Utilities, which
already has utility operations in the state of New York and will have a larger presence once
the transaction closes. We are committed to working together to
ensure that the transition is unnoticeable to our customers and
that safe and reliable water service continues throughout the
transition and beyond."
Investment Grade Financing Plan and Transaction
Details
The financing for the transaction will be consistent with
Algonquin's current investment grade credit profile. Closing
of the transaction is subject to the satisfaction or waiver of
various customary conditions including regulatory approval by the
New York Public Service Commission and review and clearance under
U.S. antitrust laws.
For more transaction details, see the fact sheet located at
http://investors.algonquinpower.com/MNA and filed with securities
regulatory authorities at www.sedar.com and www.sec.gov. The
fact sheet is incorporated by reference herein.
Algonquin's management team will provide further insights on the
transaction at its upcoming Analyst & Investor Days in
Toronto on December 3, 2019 and New York on December 6,
2019.
Advisors
CIBC Capital Markets acted as Financial Advisor to
Liberty/Algonquin and Husch Blackwell LLP served as transaction
legal counsel to Liberty/Algonquin.
About Algonquin Power & Utilities Corp.
Algonquin is a diversified international generation,
transmission and distribution utility with approximately U.S.
$11 billion of total assets. Through
its two business groups, Algonquin is committed to providing safe,
reliable and cost effective rate-regulated natural gas, water, and
electricity generation, transmission and distribution utility
services to over 800,000 connections in the United States and Canada, and is a global leader in renewable
energy through its portfolio of long-term contracted wind, solar
and hydroelectric generating facilities representing over 2,500
megawatts of net installed capacity and more than 1,400 megawatts
of additional renewable energy capacity under construction.
Algonquin delivers continuing growth through an expanding global
pipeline of renewable energy, electric transmission, and water
infrastructure development projects, organic growth within its
rate-regulated generation, distribution and transmission
businesses, and the pursuit of accretive acquisitions. Algonquin's
common shares, Series A preferred shares, and Series D preferred
shares are listed on the Toronto Stock Exchange under the symbols
AQN, AQN.PR.A, and AQN.PR.D. Algonquin's common shares, Series
2018-A subordinated notes and Series 2019-A subordinated notes are
listed on the New York Stock Exchange under the symbols AQN, AQNA
and AQNB.
Visit Algonquin
at www.algonquinpowerandutilities.com and follow us on
Twitter @AQN_Utilities.
Caution Regarding Forward-Looking Information
Certain statements included in this news release constitute
"forward-looking information" within the meaning of applicable
securities laws in each of the provinces of Canada and the respective policies,
regulations and rules under such laws and "forward-looking
statements" within the meaning of the U.S. Private Securities
Litigation Reform Act of 1995 (collectively, "forward-looking
statements"). The words "will", "expects", "intends", "should" and
similar expressions are often intended to identify forward-looking
statements, although not all forward-looking statements contain
these identifying words. Specific forward-looking statements
contained in this news release include, but are not limited to:
statements regarding expected financing plans and impact on credit
metrics, expectations regarding current New York American Water
customers, rates and employees, Liberty Utilities' future
investments and community engagement, the completion and benefits
of the proposed transaction, and New York American Water's
continuing operations. These statements are based on factors or
assumptions that were applied in drawing a conclusion or making a
forecast or projection, including assumptions based on historical
trends, current conditions and expected future developments. Since
forward-looking statements relate to future events and conditions,
by their nature they rely upon assumptions and involve inherent
risks and uncertainties. Algonquin cautions that although it is
believed that the assumptions are reasonable in the circumstances,
actual results may differ materially from the expectations set out
in the forward-looking statements. Material risk factors include
those set out in Algonquin's most recent annual and interim
Management's Discussion and Analysis and most recent Annual
Information Form, filed with securities regulatory authorities in
Canada and the United States. Given these risks, undue
reliance should not be placed on these forward-looking statements,
which apply only as of their dates. Other than as specifically
required by law, Algonquin undertakes no obligation to update any
forward-looking statements to reflect new information, subsequent
or otherwise.
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SOURCE Algonquin Power & Utilities Corp.