Proceeds intended to be used for Pivotal
Home Solutions acquisition when final
American Water Works Company, Inc. (NYSE:AWK) announced today
the pricing of a registered underwritten offering of 2,320,000
shares of its common stock at a price per share of $80.50 in
connection with the forward sale agreements as discussed below.
J.P. Morgan and Wells Fargo Securities are acting as joint
book-running managers for this offering. In connection with the
offering, American Water entered into forward sale agreements with
affiliates of each of the underwriters, J.P. Morgan Securities and
Wells Fargo Securities (the “forward purchasers”), pursuant to
which American Water agreed to issue and sell to the forward
purchasers (subject to American Water's right to elect cash
settlement or net share settlement under the forward sale
agreements) 2,320,000 shares of its common stock at an initial
forward sale price per share equal to the price per share at which
the underwriters agreed to purchase the shares in the offering,
subject to certain adjustments, upon physical settlement of the
forward sale agreements. In connection with the forward sale
agreements, the forward purchasers (or affiliates thereof) have
agreed to borrow from third-party lenders and sell to the
underwriters 2,320,000 shares of the Company’s common stock.
The offering is expected to close on April 16, 2018.
Settlement of the forward sale agreements is required to occur
on or before April 11, 2019. The Company will not receive any
proceeds from the sale of the common stock sold by the forward
purchasers to the underwriters.
As separately announced today, the Company has agreed to acquire
all of the capital stock of Nicor Energy Services Company, doing
business as Pivotal Home Solutions. The Company intends to elect
full physical settlement of the forward sale agreements described
above if it successfully completes this acquisition and to use any
net proceeds that it receives upon settlement to fund a portion of
the purchase price of this acquisition.
The offering is being made pursuant to American Water’s
effective shelf registration statement filed with the Securities
and Exchange Commission. The preliminary prospectus supplement and
the accompanying base prospectus related to the offering will be
available on the SEC’s website at www.sec.gov. Copies of the
preliminary prospectus supplement and the accompanying base
prospectus relating to this offering may be obtained from the
joint-book running managers for the offering as follows:
J.P. Morgan Securities LLCc/o Broadridge Financial Solutions1155
Long Island AvenueEdgewood, NY 11717Telephone: (866) 803-9204
Wells Fargo Securities, LLCAttn: Equity Syndicate Dept.375 Park
AvenueNew York, NY 10152Email:
cmclientsupport@wellsfargo.comTelephone: (800) 326-5897
This press release does not constitute an offer to sell or the
solicitation of an offer to buy these securities, nor shall there
be any sale of these securities in any jurisdiction in which the
offer, solicitation or sale of these securities would be unlawful
prior to registration or qualification under the securities laws of
any jurisdiction. The offering of these securities will be made
only by means of a prospectus and a related prospectus supplement
meeting the requirements of Section 10 of the Securities Act of
1933, as amended.
About American Water
With a history dating back to 1886, American Water is the
largest and most geographically diverse U.S. publicly traded water
and wastewater utility company. The company employs more than 6,900
dedicated professionals who provide regulated and market-based
drinking water, wastewater and other related services to an
estimated 15 million people in 46 states and Ontario, Canada.
American Water provides safe, clean, affordable and reliable water
services to our customers to make sure we keep their lives flowing.
For more information, visit amwater.com and follow American Water
on Twitter, Facebook and LinkedIn.
Cautionary Statement Concerning Forward-Looking
Statements
Certain statements in this press release including, without
limitation, with respect to the public offering of the Company’s
securities, the settlement of the forward sale agreements described
herein, and the completion of the acquisition described in this
press release, and the intended use of proceeds, are
forward-looking statements within the meaning of the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995
and the Federal securities laws. In some cases, these
forward-looking statements can be identified by words with
prospective meanings such as “intend,” “plan,” “estimate,”
“believe,” “anticipate,” “expect,” “predict,” “project,” “propose,”
“assume,” “forecast,” “outlook,” “future,” “pending,” “goal,”
“objective,” “potential,” “continue,” “seek to,” “may,” “can,”
“will,” “should” and “could” and or the negative of such terms or
other variations or similar expressions. These forward-looking
statements are predictions based on American Water’s current
expectations and assumptions regarding future events. They are not
guarantees or assurances of any outcomes, financial results of
levels of activity, performance or achievements, and readers are
cautioned not to place undue reliance upon them. The
forward-looking statements are subject to a number of estimates and
assumptions, and known and unknown risks, uncertainties and other
factors. Actual results may differ materially from those discussed
in the forward-looking statements included in this press release as
a result of the factors discussed in the Company’s Annual Report on
Form 10-K for the year ended Dec. 31, 2017, and subsequent filings
with the SEC, and because of factors such as: the decisions of
governmental and regulatory bodies, including decisions to raise or
lower customer rates; the timeliness and outcome of regulatory
commissions’ actions concerning rates, capital structure,
authorized return on equity, capital investment, system
acquisitions, taxes, permitting and other decisions; changes in
customer demand for, and patterns of use of, water, such as may
result from conservation efforts; limitations on the availability
of our water supplies or sources of water, or restrictions on our
use thereof, resulting from allocation rights, governmental or
regulatory requirements and restrictions, drought, overuse or other
factors; changes in laws, governmental regulations and policies,
including with respect to environmental, health and safety, water
quality and emerging contaminants, public utility and tax
regulations and policies, and impacts resulting from U.S., state
and local elections; weather conditions and events, climate
variability patterns, and natural disasters, including drought or
abnormally high rainfall, prolonged and abnormal ice or freezing
conditions, strong winds, coastal and intercoastal flooding,
earthquakes, landslides, hurricanes, tornadoes, wildfires,
electrical storms and solar flares; the outcome of litigation and
similar governmental proceedings, investigations or actions,
including matters related to the Freedom Industries chemical spill
in West Virginia and the preliminarily approved global class action
settlement agreement related to this chemical spill; our ability to
appropriately maintain current infrastructure, including our
operational and information technology (“IT”) systems, and manage
the expansion of our business; exposure or infiltration of our
critical infrastructure, operational technology and IT systems,
including the disclosure of sensitive or confidential information
contained therein, through physical or cyber attacks or other
means; our ability to obtain permits and other approvals for
projects; changes in our capital requirements; our ability to
control operating expenses and to achieve efficiencies in our
operations; the intentional or unintentional actions of a third
party, including contamination of our water supplies or water
provided to our customers; our ability to obtain adequate and
cost-effective supplies of chemicals, electricity, fuel, water and
other raw materials that are needed for our operations; our ability
to successfully meet growth projections for our business and
capitalize on growth opportunities, including our ability to, among
other things, acquire and integrate water and wastewater systems
into our regulated operations, and enter into contracts and other
agreements with, or otherwise obtain, new customers in our
market-based businesses; risks and uncertainties associated with
contracting with the U.S. government, including ongoing compliance
with applicable government procurement and security regulations;
cost overruns relating to improvements in or the expansion of our
operations; our ability to maintain safe work sites; our exposure
to liabilities related to environmental laws and similar matters
resulting from, among other things, water and wastewater service
provided to customers, including, for example, our water service
and management solutions that are focused on customers in the
natural gas exploration and production market; changes in general
economic, political, business and financial market conditions;
access to sufficient capital on satisfactory terms and when and as
needed to support operations and capital expenditures; fluctuations
in interest rates; restrictive covenants in or changes to the
credit ratings on us or our current or future debt that could
increase our financing costs or funding requirements or affect our
ability to borrow, make payments on debt or pay dividends;
fluctuations in the value of benefit plan assets and liabilities
that could increase our cost and funding requirements; changes in
federal or state general, income and other tax laws, including any
further rules, regulations, interpretations and guidance by the
U.S. Department of the Treasury and state or local taxing
authorities related to the enactment of the Tax Cuts and Jobs Act,
the availability of tax credits and tax abatement programs, and our
ability to utilize our U.S. federal and state income tax net
operating loss carryforwards; migration of customers into or out of
our service territories; the use by municipalities of the power of
eminent domain or other authority to condemn our systems, or the
assertion by private landowners of similar rights against us;
difficulty or inability to obtain insurance, the inability to
obtain insurance at acceptable rates and on acceptable terms and
conditions, or an inability to obtain reimbursement under existing
insurance programs for any losses sustained; the incurrence of
impairment charges related to our goodwill or other assets; labor
actions, including work stoppages and strikes; the ability to
retain and attract qualified employees; civil disturbances or
terrorist threats or acts, or public apprehension about future
disturbances or terrorist threats or acts; the impact of new, and
changes to existing, accounting standards; the completion of the
acquisition described in this press release; our ability to finance
the purchase price of the acquisition; our ability to realize any
benefits and synergies following the completion of the acquisition;
unexpected costs, liabilities or delays associated with the
acquisition or the integration of the acquired business; the
execution of the forward sale agreements described in this press
release; the timing and method of settlement of such forward sale
agreements; and the amount and intended use of any proceeds from
the settlement of such forward sale agreements .
These forward-looking statements are qualified by, and should be
read together with, the risks and uncertainties set forth above and
the risk factors included in the Company’s annual, quarterly and
other SEC filings, and readers should refer to such risks,
uncertainties and risk factors in evaluating such forward-looking
statements. Any forward-looking statements speak only as of the
date of this press release. The Company does not have or undertake
any obligation or intention to update or revise any forward-looking
statement, whether as a result of new information, future events,
changed circumstances or otherwise, except as otherwise required by
the Federal securities laws. Furthermore, it may not be possible to
assess the impact of any such factor on the Company’s businesses,
either viewed independently or together, or the extent to which any
factor, or combination of factors, may cause results to differ
materially from those contained in any forward-looking statement.
The foregoing factors should not be construed as exhaustive.
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American Water Works Company, Inc.Edward Vallejo,
856-566-4005Vice President, Investor
Relationsedward.vallejo@amwater.comorMaureen Duffy,
856-309-4546Vice President, Communications and Federal
Affairsmaureen.duffy@amwater.com
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