false
0000766829
0000766829
2026-03-04
2026-03-04
iso4217:USD
xbrli:shares
iso4217:USD
xbrli:shares
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
8-K
CURRENT REPORT
Pursuant to Section 13
OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) March 4, 2026
H2O
America
(Exact
name of registrant as specified in its charter)
| Delaware |
| 001-8966 |
| 77-0066628 |
| (State or other jurisdiction of
incorporation) |
| (Commission File Number) |
| (IRS Employer
Identification No.) |
| 110 West Taylor Street, |
San Jose, |
CA |
|
95110 |
| (Address of principal
executive offices) |
|
(Zip Code) |
(408)
279-7800
Registrant’s
telephone number, including area code
Not
Applicable
(Former
name or former address, if changed since last report)
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under
any of the following provisions:
¨ Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities
registered pursuant to Section 12(b) of the Act:
| Title
of each class |
| Trading
Symbol(s) |
| Name
of each exchange on which registered |
| Common Stock, par value $0.001 per share |
| HTO |
| Nasdaq Global Select Market |
Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter):
Emerging growth company ¨
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ¨
Item 1.01. Entry into a Material Definitive Agreement
The disclosure regarding the
Forward Sale Agreements (as defined below) under Item 8.01 of this Current Report on Form 8-K is incorporated herein by reference.
Item 7.01. Regulation FD Disclosure
On March 2, 2026, H2O
America (the “Company”) issued a press release announcing the Offering (as defined below), and on March 3, 2026, the
Company issued a press release announcing that it had priced the Offering. Copies of these press releases are furnished as Exhibits 99.1
and 99.2 hereto and are incorporated herein by reference.
The Company anticipates that
the net proceeds of the Offering, together with proceeds from certain debt financing, will be used to finance the acquisition of Quadvest,
L.P. and Quadvest Wholesale, LLC (the “Quadvest Acquisition”) and to pay related fees and expenses and for general corporate
purposes, which may include acquisitions, capital expenditures, share repurchases or debt repayment. However, the Offering is not conditioned
on the consummation of the Quadvest Acquisition or any future debt financing. If for any reason the Quadvest Acquisition does not close,
then the Company expects to use the net proceeds from the Offering for general corporate purposes, which may include acquisitions, capital
expenditures, share repurchases or debt repayment, and the Company will not have any obligation to repurchase any or all of the shares
of our common stock sold in the Offering.
The information furnished
is not deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), or otherwise subject to the liabilities of that Section, nor shall it be deemed to be incorporated by reference into any
filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as expressly set forth
by specific reference in such filing.
Item 8.01. Other Events
On March 2, 2026, the
Company entered into an Underwriting Agreement (the “Underwriting Agreement”) with J.P. Morgan Securities LLC and Wells Fargo
Securities, LLC, as representatives (the “Representatives”) of the several underwriters named therein (the “Underwriters”),
J.P. Morgan Securities LLC and Wells Fargo Securities, LLC, acting in their capacity as forward sellers (in such capacity, the “Forward
Sellers”), and JPMorgan Chase Bank, National Association, New York Branch and Wells Fargo Bank, National Association, acting in
their capacity as forward purchasers (in such capacity, the “Forward Purchasers”), in connection with the underwritten public
offering by the Underwriters (the “Offering”) of 11,484,824 shares (the “Offered Shares”) of the Company’s
common stock, par value $0.001 per share (the “Common Stock”). Of the Offered Shares, 3,937,654 shares were issued and sold
by the Company to the Underwriters, and 7,547,170 shares were borrowed from third parties and sold to the Underwriters by the Forward
Sellers.
On March 3, 2026, the
Underwriters exercised in full their option to purchase an additional 1,722,723 shares of Common Stock pursuant to the Underwriting Agreement.
On March 2, 2026 the
Company entered into forward sale agreements (the “Forward Sale Agreements”) with each of the Forward Purchasers, relating
to an aggregate of 7,547,170 shares of Common Stock, to be borrowed from third parties and sold by the Forward Sellers to the Underwriters.
The Forward Sale Agreements
provide for settlement on a settlement date or dates to be specified at the Company’s discretion on or prior to March 2, 2028.
On a settlement date or dates, if the Company decides to physically settle the Forward Sale Agreements, the Company will issue shares
of Common Stock to the Forward Purchasers at the then-applicable forward sale price. The forward sale price will initially be $51.2775
per share, which is the price at which the Underwriters have agreed to buy the shares of Common Stock pursuant to the Underwriting Agreement.
The Forward Sale Agreements provide that the initial forward sale price will be subject to adjustment based on a floating interest rate
factor equal to the overnight bank funding rate less a spread, and will be subject to decrease on each of certain dates specified in the
Forward Sale Agreements by amounts related to expected dividends on shares of the Company’s Common Stock during the term of the
Forward Sale Agreements. If the overnight bank funding rate is less than the spread on any day, the interest rate factor will result in
a daily reduction of the forward sale price. The forward sale price will also be subject to decrease if the cost to a Forward Seller of
borrowing the number of shares of the Company’s Common Stock underlying the applicable Forward Sale Agreement exceeds a specified
amount.
Before the issuance of shares
of the Company’s Common Stock, if any, upon settlement of the Forward Sale Agreements, the Company expects that the shares issuable
upon settlement of the Forward Sale Agreements will be reflected in the Company’s diluted earnings per share calculations using
the treasury stock method. Under this method, the number of shares of the Company’s Common Stock used in calculating diluted earnings
per share is deemed to be increased by the excess, if any, of the number of shares of the Company’s Common Stock that would be issued
upon full physical settlement of the Forward Sale Agreements over the number of shares of the Company’s Common Stock that could
be purchased by the Company in the market (based on the average market price of the Company’s Common Stock during the applicable
reporting period) using the proceeds receivable upon full physical settlement (based on the adjusted forward sale price at the end of
the applicable reporting period). Consequently, the Company anticipates there will be no dilutive effect on the Company’s earnings
per share except during periods when the average market price of shares of the Company’s Common Stock is above the applicable adjusted
forward sale price, which is initially $51.2775 per share, subject to increase or decrease based on the overnight bank funding rate, less
a spread, and subject to decrease by amounts related to expected dividends on shares of the Company’s Common Stock during the term
of the Forward Sale Agreements.
However, if the Company decides
to physically or net share settle the Forward Sale Agreements, delivery of shares of the Company’s Common Stock on any physical
or net share settlement of the Forward Sale Agreements will result in dilution to the Company’s earnings per share.
The Forward Sale Agreements
will be physically settled, unless the Company elects to settle the Forward Sale Agreements in cash or to net share settle the Forward
Sale Agreements (which the Company has the right to do, subject to certain conditions). If the Company decides to physically settle or
net share settle the Forward Sale Agreements, delivery of shares of Common Stock upon any physical settlement or net share settlement
of the Forward Sale Agreements will result in dilution to the Company’s earnings per share. If the Company elects cash or net share
settlement for all or a portion of the shares of Common Stock underlying such Forward Sale Agreements, the Company would expect each of
the Forward Purchasers or their respective affiliates to purchase a number of shares of Common Stock equal to the portion for which the
Company elects cash or net share settlement to the extent necessary to satisfy its obligations to return the shares of the Company’s
Common Stock the Forward Purchasers or their respective affiliates have borrowed in connection with sales of Common Stock in the Offering
and, if applicable in connection with net share settlement, to deliver shares of Common Stock to the Company. If the market value of Common
Stock at the time of such purchase is above the forward sale price at that time, the Company will pay or deliver, as the case may be,
to the Forward Purchasers under the Forward Sale Agreements, an amount in cash, or a number of shares of Common Stock with a market value,
equal to such difference. Any such difference could be significant. Conversely, if the market value of Common Stock at the time of such
purchase is below the forward sale price at that time, the Forward Purchasers will pay or deliver, as the case may be, to the Company
under the Forward Sale Agreements, an amount in cash, or a number of shares of Common Stock with a market value, equal to such difference.
Each Forward Purchaser will
have the right to accelerate its respective Forward Sale Agreement (or, in certain cases, the portion thereof that it determines is affected
by the relevant event) and require the Company to physically settle such Forward Sale Agreement on a date specified by such Forward Purchaser
if:
| · |
in
the good faith, commercially reasonable judgment of such Forward Purchaser, it or its affiliate, is unable to hedge its exposure
to the transactions contemplated by such Forward Sale Agreement because of the lack of sufficient shares of the Company’s Common
Stock being made available for borrowing by stock lenders, or it, or its affiliate, is unable to borrow such number of shares at
a rate equal to or less than an agreed maximum stock loan rate; |
| · |
the
Company declares any dividend or distribution on shares of the Company’s Common Stock payable in (i) cash in excess of
a specified amount (other than an extraordinary dividend), (ii) securities of another company, or (iii) any other type
of securities (other than the Company’s Common Stock), rights, warrants, or other assets for payment (cash or other consideration)
at less than the prevailing market price, as reasonably determined by such Forward Purchaser; |
| · |
certain
ownership thresholds applicable to such Forward Purchaser are exceeded; |
| · |
an
event is announced that, if consummated, would result in an extraordinary event (as defined in such Forward Sale Agreement), including,
among other things, certain mergers and tender offers, as well as certain events such as a delisting of the Company’s Common
Stock (each as more fully described in the relevant Forward Sale Agreement); or |
| · |
certain
other events of default or termination events occur, including, among other things, any material misrepresentation made by the Company
in connection with entry into such Forward Sale Agreement, the Company’s bankruptcy (except as described in the prospectus
supplement) or certain changes in law (each as more fully described in each Forward Sale Agreement). |
In the ordinary course of
their respective businesses, the Forward Purchasers and the Forward Sellers and/or their affiliates have in the past and may in the future
provide the Company and its affiliates with financial advisory and other services for which they have and in the future will receive customary
fees. For example, the Forward Purchasers and affiliates of the Underwriters are lenders under the Company’s credit facilities.
In connection with their participation in the Company’s credit facilities, the Forward Purchasers and such affiliates of the Underwriters
receive customary fees, and to the extent that the Company uses any of the net proceeds of the Offering to repay future borrowings outstanding
under the Company’s credit facilities, the Forward Purchasers and such affiliates of the Underwriters will receive their proportionate
share of any amount of the Company’s credit facilities that is repaid with the net proceeds of the Offering.
The foregoing descriptions
of the Underwriting Agreement and the Forward Sale Agreements do not purport to be complete and are qualified in their entirety by reference
to the full text of the Underwriting Agreement and the Forward Sale Agreements, which are filed as Exhibit 1.1, Exhibit 10.1
and Exhibit 10.2, hereto, respectively, and are incorporated herein by reference.
The Offered Shares are being
offered and sold pursuant to the Company’s Registration Statement on Form S-3 (Registration No. 333-282881) (the “Registration
Statement”). Attached hereto as Exhibit 5.1 is the opinion of counsel regarding the validity of the Offered Shares.
Cautionary Statement Concerning Forward-Looking Statements
This communication contains forward-looking statements
within the meaning of the federal securities laws relating to the Offering and the anticipated timeline for the Offering, as well as anticipated
future performance, financial and other benefits, scale, diversification, synergies and strategic direction of the combined operations.
These statements are based on current expectations, estimates, forecasts, and projections about the Company and its subsidiaries and the
industries in which the Company and its subsidiaries operate and the beliefs and assumptions of the management of the Company. Some of
these forward-looking statements can be identified by the use of forward-looking words such as “believes,” “expects,”
“may,” “will,” “should,” “seeks,” “approximately,” “intends,”
“plans,” “estimates,” “projects,” “strategy,” or “anticipates,” 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. Important factors that could cause or contribute to such differences include, but are not limited to, those
discussed in other reports and documents the Company files with the Securities and Exchange Commission (the “SEC”), specifically
the most recent Form 10-K and reports on Form 8-K filed with the SEC, each as it may be amended from time to time. 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 proposed transactions with Quadvest, L.P., a Texas limited partnership, and Quadvest Wholesale,
LLC, a Texas limited liability company (together “Quadvest”), including, the risk of the proposed transactions not closing
on the anticipated timeline, or at all, the ability to obtain required regulatory approvals, and the ability to successfully integrate
Quadvest’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, per- and polyfluoroalkyl substances (“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 impacts 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, 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. Actual results
are subject to other risks and uncertainties that relate more broadly to our overall business, including those more fully described in
our filings with the SEC, including our most recent reports on Form 10-K, Form 10-Q and Form 8-K. Forward-looking statements
are not guarantees of performance, and speak only as of the date made, and the Company undertakes no obligation to update or revise any
forward-looking statements except as required by law.
| Item 9.01 |
Financial Statements and Exhibits. |
| |
| (d) |
Exhibits |
Exhibit
Number |
Description of Document |
| |
|
| 1.1* |
Underwriting Agreement, dated March 2, 2026, by and among the Company, the Underwriters, the Forward Purchasers and the Forward Sellers. |
| 5.1* |
Opinion of Sullivan & Cromwell LLP as to the legality of the Offered Shares. |
| 10.1* |
Forward Sale Agreement, dated March 2, 2026, by and between the Company and JPMorgan Chase Bank, National Association, in its capacity as a Forward Purchaser. |
| 10.2* |
Forward Sale Agreement, dated March 2, 2026, by and between the Company and Wells Fargo Bank, National Association, in its capacity as a Forward Purchaser. |
| 23.1* |
Consent of Sullivan & Cromwell LLP (included in Exhibit 5.1). |
| 99.1* |
Press Release, dated March 2, 2026 |
| 99.2* |
Press Release, dated March 3, 2026 |
| 104 |
Cover Page Interactive Data File - the cover page XBRL tags are embedded within Inline XBRL document |
| |
| * Filed herewith. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| |
H2O America |
| |
|
| Date:
March 4, 2026 |
/s/
Ann P. Kelly |
| |
Ann
P. Kelly |
| |
Chief
Financial Officer and Treasurer |
Exhibit 99.1
H2O America Announces Proposed Offering of Common Stock with a Forward
Component
SAN JOSE, Calif., March 02 (GLOBE NEWSWIRE) – H2O America
(NASDAQ: HTO) (“HTO” or the “Company”) announced today that it has commenced an underwritten public offering of
$550 million in shares of its common stock, par value $0.001 per share (the “Offering”), subject to market and other conditions.
Of the $550 million in shares of common stock being offered, the Company expects to issue and sell directly approximately $150 million
in shares to the underwriters in the offering, and the forward purchasers (as defined below) or their respective affiliates and/or agents
expect to borrow from third parties and sell to such underwriters approximately $400 million in shares of common stock in connection with
the forward sale agreements described below.
In connection with the Offering, the Company expects to grant the underwriters
a 30-day option to purchase directly from the Company up to an additional $82.5 million in additional shares of its common stock on the
same terms as the Offering.
In
connection with the Offering, the Company expects to enter into forward sale agreements with JPMorgan Chase Bank, National Association,
New York Branch and Wells Fargo Bank, National Association (or their respective affiliates), each in its capacity as a forward counterparty
(the “forward purchasers”), pursuant to which the Company will agree to issue and sell to the forward purchasers (subject
to the Company’s right to elect cash settlement or net share settlement under the forward sale agreements) an aggregate of $400
million in shares of its common stock at an initial forward price per share equal to the price per share at which the underwriters purchase
shares in the Offering, subject to certain adjustments, upon physical settlement of the forward sale agreements. Each forward sale
agreement provides for settlement on a settlement date or dates to be specified at the Company’s discretion on or prior to March 2,
2028. If the underwriters exercise their option to purchase additional shares of common stock in the Offering, the Company expects to
issue and sell such shares directly to the underwriters.
The
Company intends to use the net proceeds of the Offering from the sale of the shares of our common stock and upon settlement of the forward
sale agreements, together with the net proceeds of certain debt financing, to finance the Quadvest Acquisition and to pay related
fees and expenses and for general corporate purposes, which may include acquisitions, capital expenditures, share repurchases or debt
repayment. However, the Offering is not conditioned on the consummation of the Quadvest Acquisition or any future debt financing. If for
any reason the Quadvest Acquisition does not close, then the Company expects to use the net proceeds from this offering for general corporate
purposes, which may include acquisitions, capital expenditures, share repurchases or debt repayment, and the Company will not have any
obligation to repurchase any or all of the shares of our common stock sold in the Offering (if any).
J.P. Morgan and Wells Fargo Securities are acting as joint book-running
managers and as representatives of the underwriters for the Offering. In connection with the offering, the Company will issue and sell
shares to the underwriters to the extent that the forward purchasers (or their respective affiliates) do not borrow and sell such number
of shares.
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 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;
or 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 email to WFScustomerservice@wellsfargo.com.
About H2O America
H2O America (NASDAQ: HTO) is a national investor-owned network of local
water and wastewater utilities united by one purpose: delivering clean, high-quality water to the communities we call home.
For H2O America, providing water is more than a responsibility - it’s
a privilege. Every connection we serve helps sustain what matters most: public health, vibrant neighborhoods, and a reliable future.
Across approximately 409,000 water and wastewater service connections,
we invest in critical infrastructure to strengthen water supply for generations to come. We stay actively engaged in our local communities
while focusing on operational excellence and delivering sustainable, long-term value to our investors.
Water is local - and so are our roots. Through our four regional water
utilities - Connecticut Water, Maine Water, San Jose Water, and Texas Water - we proudly serve more than 1.6 million people across the
country. Together, we protect what’s precious.
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 may contain 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.
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 proposed Quadvest transaction,
including, the risk of the proposed transactions not closing on the anticipated timeline, or at all, the ability to obtain required regulatory
approvals, and the ability to successfully integrate Quadvest’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; and (12) the ability to obtain financing on favorable terms, or at all (including the financing
for the proposed transactions with Quadvest in a timely manner), 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. 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
Exhibit 99.2
H2O America Announces Pricing of Offering of Common Stock with Forward
Component
SAN JOSE, Calif., March 03, 2026 (GLOBE NEWSWIRE) -- H2O America
(NASDAQ: HTO) (“HTO” or the “Company”) announced today that it has priced its previously announced underwritten
public offering of 11,484,824 shares of its common stock, par value $0.001 per share, at a public offering price of $53.00 per share (the
“Offering”). The total number of shares of common stock being offered reflects an increase of approximately $58.7 million
in shares over the offering size previously announced on March 2, 2026. Of the 11,484,824 shares of common stock being offered, the
Company agreed to issue and sell directly 3,937,654 shares of common stock to the underwriters in the offering, and the forward purchasers
(as defined below) or their respective affiliates and/or agents agreed to borrow from third parties and sell to such underwriters 7,547,170
shares of common stock, subject to certain conditions.
In connection with the Offering, the Company has granted the underwriters
a 30-day option to purchase directly from the Company up to an additional 1,722,723 shares of its common stock on the same terms as the
Offering.
In connection with the Offering, the Company entered into forward sale
agreements with JPMorgan Chase Bank, National Association, New York Branch and Wells Fargo Bank, National Association (or their respective
affiliates), each in its capacity as a forward counterparty (the “forward purchasers”), pursuant to which the Company has
agreed to issue and sell to the forward purchasers (subject to the Company’s right to elect cash settlement or net share settlement
under the forward sale agreements) an aggregate of 7,547,170 shares of its common stock at an initial forward price per share equal to
the price per share at which the underwriters purchase shares in the Offering, subject to certain adjustments, upon physical settlement
of the forward sale agreements. Each forward sale agreement provides for settlement on a settlement date or dates to be specified at the
Company’s discretion on or prior to March 2, 2028. If the underwriters exercise their option to purchase additional shares
of common stock in the Offering, the Company expects to issue and sell such shares directly to the underwriters.
The Company estimates that the net proceeds from the Offering will
be approximately $588.9 million (or $677.2 million if the option is exercised in full), after deducting the underwriting discounts and
commissions but before deducting other offering expenses. The Company intends to use the net proceeds of the Offering from the sale of
the shares of our common stock and upon settlement of the forward sale agreements, together with the net proceeds of certain debt financing,
to finance the Quadvest Acquisition and to pay related fees and expenses and for general corporate purposes, which may include acquisitions,
capital expenditures, share repurchases or debt repayment. However, this offering is not conditioned on the consummation of the Quadvest
Acquisition or any future debt financing. If for any reason the Quadvest Acquisition does not close, then the Company expects to use the
net proceeds from this offering for general corporate purposes, which may include acquisitions, capital expenditures, share repurchases
or debt repayment, and the Company will not have any obligation to repurchase any or all of the shares of our common stock sold in the
Offering (if any).
J.P. Morgan and Wells Fargo Securities are acting as joint book-running
managers and as representatives of the underwriters for the Offering. In connection with the Offering, the Company will issue and sell
shares to the underwriters to the extent that the forward purchasers (or their respective affiliates) do not borrow and sell such number
of shares.
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 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; or 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 email to WFScustomerservice@wellsfargo.com.
About H2O America
H2O America (NASDAQ: HTO) is a national investor-owned network of local
water and wastewater utilities united by one purpose: delivering clean, high-quality water to the communities we call home.
For H2O America, providing water is more than a responsibility - it’s
a privilege. Every connection we serve helps sustain what matters most: public health, vibrant neighborhoods, and a reliable future.
Across approximately 409,000 water and wastewater service connections,
we invest in critical infrastructure to strengthen water supply for generations to come. We stay actively engaged in our local communities
while focusing on operational excellence and delivering sustainable, long-term value to our investors.
Water is local - and so are our roots. Through our four regional water
utilities - Connecticut Water, Maine Water, San Jose Water, and Texas Water - we proudly serve more than 1.6 million people across the
country. Together, we protect what’s precious.
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 may contain 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.
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 proposed Quadvest transaction,
including, the risk of the proposed transactions not closing on the anticipated timeline, or at all, the ability to obtain required regulatory
approvals, and the ability to successfully integrate Quadvest’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; and (12) the ability to obtain financing on favorable terms, or at all (including the financing
for the proposed transactions with Quadvest in a timely manner), 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. 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
