H2O Innovation to be acquired by Ember Alongside IQ, CDPQ, executives

H2O Innovations announced that it has entered into a definitive arrangement agreement with Ember SPV I Purchaser Inc., an entity controlled by funds managed by Ember Infrastructure Management, LP, a New York-based private equity firm, whereby the Purchaser will acquire all of the issued and outstanding common shares in the capital of H2O Innovation, other than the Shares to be rolled over by Investissement Quebec, Caisse de depot et placement du Quebec and the key executives of the Corporation, for C$4.25 in cash per Share. The Transaction values H2O Innovation at $395 million, on a fully diluted equity basis. Ember is funding its portion of the purchase price with capital it manages on behalf of its limited partners via private equity fund capital as well as select co-investors, including funds affiliated with the Ontario Power Generation Inc. Pension Fund. Under the terms of the Arrangement Agreement, the Corporation may solicit a superior offer for a defined “go-shop” period during which Scotia Capital Inc., the Corporation’s financial advisor, will approach potential interested parties with a view to soliciting a higher offer, which the Purchaser is entitled to match. As part of the Transaction, IQ, the largest shareholder of the Corporation, has agreed to roll over all of its Shares and increase its existing equity ownership in the Corporation by acquiring approximately $20 million of additional Shares from the Purchaser for an amount per Share equal to the Consideration. Furthermore, CDPQ has agreed to roll over the majority of its Shares and the key executives of H2O Innovation have agreed to roll over a portion of their Shares for an amount per Share equal to the Consideration. Upon completion of the Transaction, Ember will be the controlling shareholder of H2O Innovation, with IQ, CDPQ and the key executives of H2O Innovation, together, holding an equity interest in the Corporation of approximately 21%.