Market Overview

SJW Group and Connecticut Water Amend Agreement; SJW Group to Acquire All Connecticut Water Shares for $70.00 per Share in Cash


Companies Reaffirm Joint Commitment to Creating Leading, Diversified
Pure Play Water Utility with Financial Strength, Geographic Diversity
and Scale to Accelerate Growth

Combination Expected to Be Immediately Accretive to SJW Group EPS,
Increasing to High Single Digit Percentage Accretive to SJW Group EPS in

Represents a Superior Offer for Connecticut Water with a Significant
Premium of 33% to its Unaffected Share Price

Amended Transaction to be Funded with Conservative Mix of Equity and
Debt to Achieve at Least "A-" Credit Rating for SJW Group and Maintain
Ability to Sustain Comparable Levels of Investment and Dividends

SJW Group (NYSE:SJW) ("SJW Group") and Connecticut Water Service, Inc.
(NASDAQ:CTWS) ("Connecticut Water") today announced that they have
amended the terms of their previously announced merger agreement from a
stock-for-stock transaction to an all-cash acquisition of all
outstanding common shares of Connecticut Water by SJW Group for $70.00
per Connecticut Water common share. The cash transaction, which has a
value of $1.1 billion and an equity purchase price of $843 million, is
expected to be immediately accretive to SJW Group's earnings per share
(EPS) in 2019 (post-close), increasing each year thereafter to high
single-digit percentage EPS accretion in 2021.

The SJW Group and Connecticut Water Service Board of Directors each
approved the amended merger agreement to help facilitate the closing of
the companies' transformative combination and ensure that their
shareholders, customers, employees and communities realize its
significant benefits. The respective Boards also believe that the $70.00
per share cash consideration will resolve any market distractions
resulting from otherwise-inferior proposals for Connecticut Water. The
amended merger agreement was unanimously approved by the Connecticut
Water Board of Directors and by all SJW Group directors other than Eric
Thornburg, who abstained from voting due to his ownership of Connecticut
Water shares and the all-cash nature of the acquisition.

"The amended agreement reflects our continued and shared commitment with
Connecticut Water to combine our two companies to create a leading
national water and wastewater utility," said Robert Van Valer, the lead
independent director of SJW Group's Board of Directors and trustee of
the Roscoe Moss Jr. Revocable Trust, which is the largest stockholder of
SJW Group. "Under the revised terms, the combination will substantially
enhance our long-term value and significantly benefit our shareholders,
employees, customers and local service area communities. Together, we
will have a multi-state presence with a broader and more attractive
growth platform and capacity to invest in our infrastructure, maintain
our local operations and focus, provide greater opportunities for our
employees and increase shareholder value over the immediate- and

Carol P. Wallace, Chairman of the Connecticut Water Service Board, said,
"Over the last two years, the Connecticut Water Service Board of
Directors has conducted a thorough process considering various
alternatives for a merger, acquisition or other strategic transaction
designed to serve the best interest of Connecticut Water shareholders,
customers, and employees and communities. We are pleased to reach this
amended agreement with SJW Group, which achieves that objective by
delivering a 33% premium and substantial cash value to shareholders
while also honoring all the stakeholder commitments of the previously
announced merger. This transaction continues to provide long-term
benefits for customers, employees and communities with experienced local
employees, leadership team and the New England headquarters remaining in
Clinton. We are confident that SJW Group is the ideal partner for
Connecticut Water and look forward to achieving continued growth and
success as the third-largest investor-owned pure-play water and
wastewater utility in the United States."


Under the terms of the amended agreement, SJW Group will acquire all of
the issued and outstanding common shares of Connecticut Water at a price
of $70.00 per common share. This represents a superior offer with a
significant premium of 33% to Connecticut Water's unaffected closing
share price of $52.57 on March 14, 2018 and exceeds Connecticut Water's
all-time high price of $69.72 per common share.

Following the close of the all-cash merger, SJW Group's Board of
Directors will expand by two seats, with the two vacancies to be filled
by current Connecticut Water Service directors to be appointed by SJW
Group to further bolster the Board's expertise in the New England
market. The combined company's headquarters will be located in San Jose,
CA, and its New England headquarters will be located in Clinton, CT.
Members of Connecticut Water's current executive team are expected to
lead the New England region of the combined company. The combined
company will be called SJW Group, with the New England organization
known as Connecticut Water Service, Inc., and each of the company's
current operating subsidiaries will continue to operate under their
existing brand names.


The revised transaction terms maintain the compelling highlights of the
previously announced combination of SJW Group and Connecticut Water:

  • The formation of a leading, pure-play and geographically diverse
    water franchise
    , which on a pro-forma basis will be the
    third-largest investor-owned water and wastewater utility in the
    United States and, we believe, will have very attractive growth
    opportunities in the years to come and remain in a position to provide
    opportunities to employees and deliver safe and reliable water to
  • Highly attractive, stable and increased earnings growth
    . The combined company is expected to have operating
    revenue of approximately $496 million and recurring net income of
    approximately $74 million on a 2017 pro forma basis.
  • Immediate EPS accretion for SJW Group shareholders in 2019
    (post-close), increasing each year thereafter to high single digit
    percentage EPS accretion in 2021. Connecticut Water shareholders will
    receive a significant and certain premium for their shares upon
  • A robust balance sheet that enhances financial flexibility to
    increase sustained growth in SJW Group's rate base
    , continue
    necessary investments in its water systems and employees and
    create a stronger, more stable utility enterprise with greater
    diversification and continued strong operating cash flow and dividends.
  • Continued dividend growth with a strong investment grade credit
    rating of at least "A-" expected for the combined company. SJW Group
    anticipates that it will be able to continue its robust dividend
    payment trajectory.
  • Low integration risk with an experienced management team that
    has over 187 years of combined experience in water utilities,
    significant expertise in each market the combined company will operate
    in and a proven track record of integrating numerous smaller

Eric Thornburg, SJW Group's Chairman, President and Chief Executive
Officer, said, "SJW Group is entering this combination from a position
of financial strength and with attractive growth opportunities. We are
confident that under the terms of this revised transaction the combined
company will be able to accelerate our growth, enhance the quality of
our services and offerings for customers and deliver significant value
to our shareholders and our communities. We look forward to continuing
our discussions with all of our stakeholders about the significant
benefits we believe this combination provides."


"We consider this combination with the SJW Group as a unique opportunity
to deliver superior value to our shareholders and still honor the
commitments made to our customers, employees and communities which are
at the core of our brand and mission of delivering life sustaining, high
quality water service to families and communities," said David C.
Benoit, President and Chief Executive Officer of Connecticut Water.

  • Serving local communities with a passionate, dedicated team of
    locally-based water professionals.
    Each of the combined company's
    operating utilities and their customers will continue to be supported
    locally by a team of passionate, dedicated employees and existing
    leaders. They will bring their extensive certifications, operating
    experience and local knowledge to the communities they serve.
  • Delivering customer benefits. The new organization will
    maintain the longstanding commitments of SJW Group and Connecticut
    Water to outstanding customer service, which will be enhanced by
    sharing of best practices, operational expertise and more extensive
    resources. There will be no change in customer rates as a result of
    the transaction, and the operating subsidiaries of the combined
    company will each continue to be subject to oversight by their
    respective state regulatory commissions for rates and quality of
  • Honoring commitments to employees. Following the close of the
    transaction, employees will have additional opportunities for career
    development and geographic mobility as part of a larger, stronger,
    more diverse organization. Importantly, the combined company has
    committed that there will be no layoffs as a result of the transaction
    and does not anticipate any significant changes in employee
    compensation or benefits packages. SJW Group values its trusted union
    partnerships, and all union contracts will continue to be honored.
  • Maintaining environmental stewardship. Environmental
    stewardship is a core value for both organizations, given the local
    nature of the water business. Both companies have been industry
    leaders in their efforts to promote water conservation and protect the
    valuable lands and water resources that have been entrusted to them.
    That focus will continue as the combined company seeks to further
    reduce its environmental footprint and look for opportunities to
    improve the sustainability of its business practices.
  • Ongoing support of communities. In addition to retaining
    dedicated employee teams across its footprint, the new company will
    maintain strong community ties and participation in community events
    and organizations. The combined company will continue to focus on
    supporting economic development with investments in growth, safety and


J.P. Morgan is providing committed financing for the revised transaction
in the form of a new $975 million bridge loan facility. SJW Group will
assume Connecticut Water's existing debt and ultimately fund the $843
million equity purchase price through a conservative mix of debt and
equity, with $450-550 million of equity. SJW Group anticipates that this
conservative financing mix will allow SJW Group to maintain an
attractive, strong investment grade credit rating of at least "A-",
enabling continued investment in the infrastructure, operations and
customer service capabilities of the combined company. Additionally, SJW
Group anticipates that it will be able to continue SJW Group's robust
dividend history and continue to pay an attractive and consistent cash
dividend to shareholders.


The revised transaction, which is expected to close in the first quarter
of 2019, is subject to customary closing conditions and approvals,
including the approval of Connecticut Water shareholders, the approvals
of the Connecticut Public Utilities Regulatory Authority and the Maine
Public Utilities Commission and the approval of the Federal
Communications Commission. The waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act was terminated early on
April 27, 2018. The California Public Utilities Commission (CPUC)
previously instituted an investigation into whether the transaction is
subject to its approval and anticipated impacts in California. The CPUC
is planning to complete its inquiry in time to allow the acquisition to
go forward, if appropriate, by the end of 2018. It is anticipated that
consideration of the revised transaction will not substantially extend
the current CPUC investigation.

The transaction is not subject to any financing condition. The revised
transaction does not require approval from SJW Group shareholders and
the previously anticipated special meeting of SJW Group shareholders to
vote on the revised transaction will not take place.

Connecticut Water Service's Board of Directors unanimously recommends
that Connecticut Water shareholders vote in favor of the revised
transaction. A date for the special meeting of Connecticut Water
shareholders to vote on the revised transaction will be set in the near

SJW Group's Board of Directors unanimously recommends that SJW Group
shareholders discard the white cards and any materials received from
California Water Service (NYSE:CWT) as part of its tender offer
solicitation to acquire SJW Group. If SJW Group shareholders have
previously tendered their shares, they may revoke their tender by
contacting Georgeson LLC using the contact information provided below.


J.P. Morgan Securities LLC is serving as financial advisor to SJW Group,
and Skadden, Arps, Slate, Meagher & Flom LLP is legal counsel.

Wells Fargo Securities, LLC is serving as Connecticut Water's financial
advisor and Sullivan & Cromwell LLP as its legal counsel.

For additional information, please visit

Cautionary Statement Regarding Forward-Looking

This document contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995, as amended. 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.

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 risk that the conditions to the closing of
the transaction are not satisfied, including the risk that required
approval from the shareholders of Connecticut Water for the transaction
is not obtained; (2) the risk that the regulatory approvals required for
the transaction are not obtained, on the terms expected or on the
anticipated schedule; (3) the effect of water, utility, environmental
and other governmental policies and regulations; (4) litigation relating
to the transaction; (5) the ability of the parties to the transaction to
meet expectations regarding the timing, completion and accounting and
tax treatments of the proposed transaction; (6) the occurrence of any
event, change or other circumstance that could give rise to the
termination of the transaction agreement between the parties to the
proposed transaction; (7) changes in demand for water and other products
and services of Connecticut Water; (8) unanticipated weather conditions;
(9) catastrophic events such as fires, earthquakes, explosions, floods,
ice storms, tornadoes, terrorist acts, physical attacks, cyber-attacks,
or other similar occurrences that could adversely affect Connecticut
Water's facilities, operations, financial condition, results of
operations, and reputation; (10) risks that the proposed transaction
disrupts the current plans and operations of Connecticut Water;
(11) potential difficulties in employee retention as a result of the
proposed transaction; (12) unexpected costs, charges or expenses
resulting from the transaction; (13) the effect of the announcement or
pendency of the proposed transaction on Connecticut Water's business
relationships, operating results, and business generally, including,
without limitation, competitive responses to the proposed transaction;
(14) risks related to diverting management's attention from ongoing
business operations of Connecticut Water; (15) the trading price of
Connecticut Water's common stock; and (16) legislative and economic

In addition, actual results are subject to other risks and uncertainties
that relate more broadly to Connecticut Water's overall business and
financial condition, including those more fully described in Connecticut
Water's filings with the U.S. Securities and Exchange Commission (the
"SEC"), including, without limitation, its annual report on Form 10-K
for the fiscal year ended December 31, 2017. Forward looking statements
are not guarantees of performance, and speak only as of the date made,
and none of SJW Group, its management, Connecticut Water or its
management undertakes any obligation to update or revise any
forward-looking statements except as required by law.

Additional Information and Where to Find It

This communication may be deemed to be solicitation material in respect
of the proposed acquisition of Connecticut Water by SJW Group. In
connection with the proposed transaction, SJW Group and Connecticut
Water intend to file relevant materials with the SEC, including
Connecticut Water's proxy statement on Schedule 14A. SHAREHOLDERS

Investors and security holders will be able to obtain the documents free
of charge at the SEC's web site,,
and Connecticut Water's shareholders will receive information at an
appropriate time on how to obtain transaction-related documents free of
charge from Connecticut Water. Such documents are not currently

Participants in Solicitation

SJW Group and its directors and executive officers, and Connecticut
Water and its directors and executive officers, may be deemed to be
participants in the solicitation of proxies from the holders of
Connecticut Water's common stock in respect of the proposed transaction.
Information about the directors and executive officers of SJW Group is
set forth in the proxy statement for SJW Group's 2018 Annual Meeting of
Stockholders, which was filed with the SEC on March 6, 2018. Information
about the directors and executive officers of Connecticut Water is set
forth in the proxy statement for Connecticut Water's 2018 Annual Meeting
of Shareholders, which was filed with the SEC on April 6, 2018.
Investors may obtain additional information regarding the interest of
such participants by reading the proxy statement regarding the
acquisition when it becomes available.

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