Water and wastewater utility Aqua America has secured $750m investment from Canada Pension Plan Investment Board (CPPIB).
The investment will support Aqua America in completing the pending acquisition of Peoples Natural Gas. The investment is expected to close concurrently with the Peoples acquisition.
Through the investment, CPPIB will now own about 21.7 million newly issued shares of Aqua America’s common stock.
Announced last October, Aqua’s acquisition of Peoples is expected to create a utility infrastructure company that will be positioned to make an impact on improving infrastructure reliability, quality and of life and economic prosperity in its service areas.
The acquisition by the Pennsylvania-based water utility company Aqua America includes Peoples Natural Gas Company, Peoples Gas Company and Delta Natural Gas Company. The transaction brings together the second largest water utility and the fifth largest stand-alone natural gas local distribution company in the US.
The combined company of Aqua America and Peoples will result in a footprint across 10 states and will have a large concentration in Pennsylvania.
The acquisition of Peoples is an all-cash transaction, with an enterprise value of $4.28bn including the assumption of $1.3bn of debt. Aqua America will acquire Peoples from infrastructure funds managed by Sausalito, California-based SteelRiver Infrastructure Partners.
Aqua America chairman and CEO Christopher Franklin said: “CPPIB’s investment in Aqua is an impactful contribution toward closing our acquisition of Peoples. This investment positions us well as we look ahead to completing the permanent financing for the Peoples acquisition, and we appreciate CPPIB’s commitment to this transformational endeavor.”
The combined company will serve 1.74 million customer connections, representing nearly 5 million people. In 2019, the new company is expected to have an asset base of $10.8bn in assets and a projected regulated rate base of over $7.2bn.