H2O America Announces Proposed Offering of Equity Units

The proposed units combine future common-stock purchases with senior notes due 2031, with proceeds intended partly for 2029 debt refinancing.

Rhea-AI Summary

H2O America (NASDAQ: HTO) has commenced a proposed underwritten public offering of equity units with a $325 million aggregate stated amount. The offering comprises 6.5 million units at $50 each, subject to market and other conditions. Each unit initially combines a future common-stock purchase contract with a 1/20 beneficial interest in $1,000 principal amount of remarketable senior notes due 2031.

The company expects to issue common shares under the contracts on or about November 1, 2029 and grant underwriters an option for up to 975,000 additional units, representing $48.75 million. Proceeds are intended for general corporate purposes and to satisfy part of future equity needs to refinance a portion of debt maturing in 2029. The company plans to seek Nasdaq Global Select Market listing for the units, with trading expected within 30 days of initial issuance, subject to approval.

3 points · 0 major

MixediHow this balance works

How this balance works

Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.

It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.

Rhea-AI Sentiment measures something else, the tone of the wording.

How the balance worksHow Sentiment works

0 major · 4 points

Hollow bars mark forward-looking points. How the balance works

Positive

• Moderate point. Forward-looking: it has not happened yet and may not happen.Proposed $325 million offering would raise funding through 6.5 million equity units at $50 each. 11% of market cap
• Minor point. Forward-looking: it has not happened yet and may not happen.Over-allotment option would allow up to 975,000 additional units, representing $48.75 million in additional stated amount.
• Minor point. Forward-looking: it has not happened yet and may not happen.Planned proceeds use includes satisfying part of future equity needs to refinance a portion of debt maturing in 2029.

Negative

• Moderate point. Forward-looking: it has not happened yet and may not happen.Future common-stock issuance is expected on or about November 1, 2029, creating dilution for existing holders.
• Minor point. Forward-looking: it has not happened yet and may not happen.Senior notes due 2031 add debt obligations; each unit includes a 1/20 interest in $1,000 principal amount.
• Minor pointOffering completion remains subject to market and other conditions.
• Minor pointUnit listing approval remains pending for planned Nasdaq Global Select Market trading.

Key Figures

Offering size: 6.5 million equity units Stated amount: $50 per unit; $325 million aggregate stated amount Senior notes interest: 1/20 undivided beneficial ownership interest in $1,000 principal amount +2 more

Offering size

6.5 million equity units

Proposed underwritten public offering

Stated amount

$50 per unit; $325 million aggregate stated amount

Proposed offering

Senior notes interest

1/20 undivided beneficial ownership interest in $1,000 principal amount

Each corporate unit includes an interest in remarketable senior notes due 2031

Additional units option

Up to 975,000 units; $48.75 million additional aggregate stated amount

Underwriters' over-allotment option exercisable within 13 days beginning on initial issuance

Expected stock issuance

On or about November 1, 2029

Settlement of purchase contracts

Key Terms

treasury stock method, shelf registration statement, prospectus supplement, over-allotments

4 terms

treasury stock method financial

"reflected in the Company’s diluted earnings per share calculations using the treasury stock method"

A bookkeeping technique used to estimate how many additional shares would exist if all outstanding stock options, warrants and convertible securities were exercised, assuming the company uses the cash received to buy back shares at the current market price. Investors use it to calculate diluted earnings per share and to gauge potential ownership and profit dilution—like figuring out how a pie would be divided if more people claimed slices and some money was used to buy slices back.

shelf registration statement regulatory

"made pursuant to an effective shelf registration statement filed with the SEC"

A shelf registration statement is a document a company files with regulators that allows it to sell shares or bonds quickly when it’s a good time to raise money. It’s like having a pre-approved plan ready so the company can act fast without going through lengthy paperwork each time they want to sell, making fundraising more flexible.

prospectus supplement regulatory

"made only by means of a prospectus supplement, including the accompanying base prospectus"

A prospectus supplement is an additional document provided alongside a company's main offering details, offering updated or extra information about a specific financial product being sold. It helps investors understand the latest terms, risks, and details of the investment, similar to how an update or revision clarifies or expands on original instructions, ensuring they have current and complete information before making a decision.

over-allotments financial

"solely for the purpose of covering over-allotments"

An over-allotment is a temporary extra batch of shares that the underwriters of a stock offering are allowed to sell beyond the original amount, with the right to buy those shares back later. Think of it as spare tickets sold to meet demand and then reclaimed if needed to keep the market orderly; it helps stabilize the stock price after an offering and can affect short-term supply and potential dilution, which matters to investors tracking price and ownership stakes.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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SAN JOSE, Calif., Oct. 29, 2026 (GLOBE NEWSWIRE) -- H2O America (NASDAQ: HTO) (the “Company”) announced today that it has commenced an underwritten public offering of 6.5 million equity units (the “Offering”), subject to market and other conditions. Each equity unit will be issued in a stated amount of $50 ($325 million aggregate stated amount) and will initially be in the form of a corporate unit consisting of a contract to purchase the Company’s common stock in the future (the “purchase contract”) and a 1/20 undivided beneficial ownership interest in $1,000 principal amount of the Company’s remarketable senior notes due 2031. Pursuant to the terms of the equity units, we expect to issue shares of the Company’s common stock to holders on or about November 1, 2029. Before the issuance of the Company’s common stock upon settlement of the purchase contracts, the purchase contracts will be reflected in the Company’s diluted earnings per share calculations using the treasury stock method.

In connection with the Offering, the Company expects to grant the underwriters an option to purchase up to an additional 975,000 corporate units ($48.75 million additional aggregate stated amount), solely for the purpose of covering over-allotments, within the 13-day period beginning on the day the Company first issues the corporate units.

The Company intends to apply to list the corporate units on the Nasdaq Global Select Market and expects trading to commence within 30 days of the date of initial issuance (subject to listing approval).

The Company intends to use the net proceeds of the Offering for general corporate purposes, which may include acquisitions, capital expenditures or debt repayment, in line with our previously communicated capital plans, and to satisfy a portion of our future equity needs to refinance a portion of our debt maturing in 2029.

Wells Fargo Securities and J.P. Morgan are acting as joint book-running managers and as representatives of the underwriters for the Offering.

The Offering is being made pursuant to an effective shelf registration statement filed with the Securities and Exchange Commission (the “SEC”). The Offering is being made only by means of a prospectus supplement, including the accompanying base prospectus. Before you invest, you should read the preliminary prospectus supplement and accompanying prospectus, the registration statement, and the other documents that the Company has filed with the SEC for more complete information about the Company and the Offering. Copies of the preliminary prospectus supplement and the final prospectus supplement, when available, may be obtained by visiting EDGAR on the SEC’s website at www.sec.gov or from Wells Fargo Securities, LLC, 90 South 7th Street, 5th Floor, Minneapolis, MN 55402, Attention: WFS Customer Service, toll-free at 1-800-645-3751 or by email at WFScustomerservice@wellsfargo.com or J.P. Morgan Securities LLC, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, New York 11717 or by email at prospectus-eq_fi@jpmchase.com.

About H2O America

H2O America is among the largest investor-owned pure-play water and wastewater utilities in the United States, providing life-sustaining and high-quality water service to over 1.7 million people. H2O America includes the following locally led and operated water utilities – San Jose Water Company in California, The Connecticut Water Company in Connecticut, The Maine Water Company in Maine, and SJWTX, Inc. (dba The Texas Water Company) in Texas, including Quadvest’s operations.

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

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including, but not limited to, statements relating to the proposed Offering and expected use of net proceeds, which statements are made pursuant to the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Some of these forward-looking statements can be identified by the use of forward-looking words such as “believes,” “expects,” “estimates,” “anticipates,” “intends,” “seeks,” “plans,” “projects,” “may,” “should,” “will,” “approximately,” “strategy,” or the negative of those words or other comparable terminology. These forward-looking statements are only predictions and are subject to risks, uncertainties, and assumptions that are difficult to predict. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements.

The accuracy of such statements is subject to a number of risks, uncertainties and assumptions including, but not limited to, the following factors: (1) the risks associated with the Quadvest and Cibolo Valley transactions, including, the risk of the proposed Cibolo Valley transaction not closing on the anticipated timeline, or at all, and the ability to successfully integrate Quadvest’s and Cibolo Valley's operations and realize the projected financial and other benefits of the proposed transactions; (2) the effect of water, utility, environmental and other governmental policies and regulations, including regulatory actions concerning rates, authorized return on equity, authorized capital structures, capital expenditures, PFAS and other decisions; (3) changes in demand for water and other services; (4) unanticipated weather conditions and changes in seasonality including those affecting water supply and customer usage; (5) the effect of the impact of climate change; (6) unexpected costs, charges or expenses; (7) our ability to successfully evaluate investments in new business and growth initiatives; (8) contamination of our water supplies and damage or failure of our water equipment and infrastructure; (9) the risk of work stoppages, strikes and other labor-related actions; (10) catastrophic events such as fires, earthquakes, explosions, floods, ice storms, tornadoes, hurricanes, terrorist acts, physical attacks, cyber-attacks, epidemic, or similar occurrences; (11) changes in general economic, political, legislative, business and financial market conditions; (12) the ability to obtain financing on favorable terms, which can be affected by various factors, including credit ratings, changes in interest rates, compliance with regulatory requirements, compliance with the terms and conditions of our outstanding indebtedness, and general market and economic conditions; and (13) legislative and general market and economic developments. The risks, uncertainties and other factors may cause the actual results, performance or achievements of H2O America to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.

Other factors that may cause actual results, performance or achievements to materially differ are described in the Company’s most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed with the SEC. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

H2O America Contacts:

Ann P. Kelly
Chief Financial Officer and Treasurer
(408) 385-4752
Ann.Kelly@H2O-America.com

Jonathan G. Reeder
Senior Director of Treasury & Investor Relations
(475) 414-1034
InvestorRelations@H2O-America.com

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

How large is H2O America's proposed equity-unit offering?

H2O America proposes to offer 6.5 million equity units at $50 each, with a $325 million aggregate stated amount. The company also expects to grant an over-allotment option for up to 975,000 additional corporate units, representing $48.75 million in additional aggregate stated amount.

What do H2O America's equity units contain, and when are shares expected to be issued?

Each unit initially contains a future common-stock purchase contract and a 1/20 undivided beneficial ownership interest in $1,000 principal amount of remarketable senior notes due 2031. The company expects common shares to be issued to holders on or about November 1, 2029.

How will H2O America's purchase contracts affect diluted earnings per share before settlement?

Before common shares are issued upon settlement, the purchase contracts will be reflected in diluted earnings per share using the treasury stock method, a method for calculating potential share dilution.