Global Water Announces Pricing of Public Offering of Common Stock

Rhea-AI Summary

Global Water Resources (NASDAQ: GWRS) has announced the pricing of its underwritten public offering of 2,800,000 shares of common stock at $10.00 per share. The offering, expected to close around March 27, 2025, aims to raise approximately $28 million in gross proceeds before deducting costs.

Notably, existing stockholders, including certain directors and affiliates, have committed to purchasing 1,439,200 shares. The company has also granted underwriters a 30-day option to purchase up to 420,000 additional shares at the public offering price.

The net proceeds will be used to fund acquisitions, working capital, and general corporate purposes. Roth Capital Partners and Janney Montgomery Scott are serving as underwriters for the offering, which is being made pursuant to a registration statement previously filed with the SEC.

Positive

• Significant insider participation with 1,439,200 shares committed by existing stockholders
• Strategic capital raise of $28 million to fund future acquisitions
• Strong underwriter support with 30-day option for additional shares

Negative

• Potential dilution for existing shareholders
• Offering price of $10.00 per share may represent a discount to market price
• Additional expenses from underwriting discounts and offering costs will reduce net proceeds

Insights

Financial Analyst

Global Water Resources' $28 million public offering reveals important dynamics for investors to consider. The 11-13% dilution from 2.8 million new shares (potentially 3.22 million with underwriter options) represents significant expansion of their capital structure. However, the strong insider participation with directors and affiliates purchasing over 51% of offered shares signals notable confidence from those with the most intimate knowledge of operations.

The $10.00 per share pricing, representing a modest 2% discount to current trading value, suggests reasonable market appetite without requiring excessive incentives. This balanced pricing approach indicates the company isn't desperate for capital but is strategically expanding its financial resources.

The explicit designation of proceeds for acquisitions rather than debt service or operational needs points to an expansion-focused deployment of capital. For a water utility with $247 million market capitalization, this raise represents a substantial 11.3% of their pre-offering value, suggesting potentially transformative rather than merely incremental acquisition plans.

Utilities Industry Expert

This capital raise positions Global Water Resources to accelerate consolidation in the fragmented water management sector. The pure-play water resource management model benefits substantially from economies of scale, where fixed infrastructure and compliance costs can be distributed across larger customer bases through strategic acquisitions.

The water utility sector frequently sees larger operators absorbing smaller municipal systems or private operators, particularly in regions facing water scarcity or infrastructure challenges. With climate change intensifying water resource management concerns, companies with acquisition capital enjoy significant advantages in securing valuable water rights and infrastructure.

The timing suggests opportunistic fundraising to capitalize on acquisition opportunities rather than defensive capital needs. For a specialized water management company, $28 million represents substantial firepower in a sector where smaller water systems often trade at reasonable valuations compared to larger utilities. The investment thesis hinges entirely on management's acquisition target selection and integration execution, converting this dilution into enhanced operational efficiency and expanded service territories.

PHOENIX, March 26, 2025 (GLOBE NEWSWIRE) -- Global Water Resources, Inc. (NASDAQ: GWRS), a pure-play water resource management company, today announced the pricing of an underwritten public offering of 2,800,000 shares of its common stock at a price to the public of $10.00 per share. Certain existing stockholders, including certain directors and/or their affiliates, have agreed to purchase an aggregate of 1,439,200 shares of our common stock in the offering.

All of the shares are being sold by the company. The gross proceeds to the company from the offering, before deducting underwriting discounts and commissions and estimated offering expenses, are expected to be approximately $28 million.

The offering is expected to close on or about March 27, 2025, subject to customary closing conditions.

In addition, the company has granted the underwriters for the offering a 30-day option to purchase up to an aggregate of 420,000 additional shares of its common stock at the public offering price, less underwriting discounts and commissions.

The company anticipates using the net proceeds from the offering to fund acquisitions and for working capital and other general corporate purposes.

Roth Capital Partners and Janney Montgomery Scott are acting as underwriters for the offering.

The offering will be made pursuant to a registration statement on Form S-3 that was previously filed with the Securities and Exchange Commission and declared effective on August 31, 2023. A final prospectus supplement and accompanying base prospectus relating to and describing the final terms of the offering will be filed with the SEC and will be available on the SEC’s website at www.sec.gov.

Copies of the final prospectus supplement and accompanying base prospectus relating to the offering may be obtained, when available, from Roth Capital Partners, 888 San Clemente Drive, Suite 400, Newport Beach, CA 92660; (800) 678-9147, or from Janney Montgomery Scott, 60 State Street, 13^th Floor, Boston, MA 02109, prospectus@janney.com, (617) 557-2986.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any of the securities described herein, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About Global Water Resources

Global Water Resources, Inc. is a leading water resource management company that owns and operates 32 systems which provide water, wastewater, and recycled water services. The company’s service areas are located primarily in growth corridors around metropolitan Phoenix and Tucson, Arizona. The company recycles over 1 billion gallons of water annually.

Forward-Looking Statements

Certain of the statements made in this press release are forward-looking, such as those, among others, relating to the company’s expectations regarding the anticipated closing date of the offering and its anticipated use of net proceeds from the offering. Actual results or developments may differ materially from those projected or implied in these forward-looking statements. Factors that may cause such a difference include risks and uncertainties related to completion of the public offering on the anticipated terms or at all, market conditions and the satisfaction of customary closing conditions related to the offering. More information about the risks and uncertainties faced by the company is contained in the preliminary prospectus supplement filed with the SEC and the documents incorporated by reference therein, which include the company’s Annual Report on Form 10-K for the year ended December 31, 2024. The company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Company Contact:
Michael J. Liebman
SVP and CFO
Tel (480) 999-5104
mike.liebman@gwresources.com

Investor Relations:
Ron Both, CMA
Tel (949) 432-7566
GWRS@cma.team

FAQ

How much is Global Water Resources (GWRS) raising in their 2025 public offering?

Global Water Resources is raising approximately $28 million in gross proceeds through the offering of 2,800,000 shares at $10.00 per share.

What is the price per share for GWRS's March 2025 public offering?

The public offering price is set at $10.00 per share.

How will Global Water Resources (GWRS) use the proceeds from their 2025 stock offering?

GWRS plans to use the net proceeds to fund acquisitions, working capital, and other general corporate purposes.

How many additional shares can underwriters purchase in GWRS's March 2025 offering?

Underwriters have a 30-day option to purchase up to 420,000 additional shares at the public offering price.

What portion of GWRS's 2025 offering is being purchased by existing stockholders?

Existing stockholders, including certain directors and affiliates, have agreed to purchase 1,439,200 shares of the total offering.