ALLETE Inc. Announces Sale of U.S. Water Services, Inc. to Global Water Management Company
February 08 2019 - 1:41AM
Business Wire
Sale proceeds to be reinvested in clean
energy opportunities
ALLETE, Inc. (NYSE: ALE) today announced it has entered into a
stock purchase agreement providing for the sale of U.S. Water
Services, Inc. to Kurita Water Industries Ltd., a leading
international water management company headquartered in Tokyo,
Japan, for $270 million. The purchase price is subject to
adjustment at closing, such as for changes in working capital. The
transaction is expected to close by the end of the first quarter
2019 upon receipt of regulatory approval.
Based in St. Michael, Minnesota, U.S. Water Services, an
integrated water solutions company serves a diverse mix of
approximately 5,000 customers to optimize system performance,
reduce water and energy use, and improve efficiency. It was
acquired by ALLETE in 2015. Today’s announcement supports ALLETE’s
long-term diversification strategy that includes expanding
investments in clean energy opportunities with an average annual
earnings growth objective of five to seven percent.
“This sale exemplifies our disciplined approach to providing
shareholder value while executing on our multi-faceted strategy,”
said ALLETE Chief Financial Officer Bob Adams. “Our go-forward
business mix provides attractive opportunities to meet and
potentially exceed our stated average annual earnings growth target
of five to seven percent while supporting our strong credit
ratings. Indeed, proceeds from the sale will be primarily
reinvested in growth initiatives at both our Regulated Operations
and ALLETE Clean Energy, reducing the need for equity issuances
that may otherwise arise. In addition, we will consider using a
portion of the proceeds to implement a common stock repurchase
program.”
Under ALLETE’s four year ownership and continued investment,
U.S. Water Services has grown significantly, becoming a world-class
industrial water service provider in North America through an
aggressive expansion in geography, end markets and service
offerings. Enabling investments included the acquisition of three
water services companies over the past 36 months.
“Kurita is a well-respected global enterprise, and this
agreement is a win-win for ALLETE and U.S. Water Services,” Adams
said. “This action will provide new opportunities for U.S. Water
Services to expand and grow the business, while enabling ALLETE to
allocate capital resources focused on growth initiatives within
ALLETE and ALLETE Clean Energy, which has become ALLETE’s second
largest net income contributor.”
“LaMarr Barnes, his talented senior leadership team and
committed U.S. Water employees have been an important part of
ALLETE’s corporate history and family of companies delivering on
our commitment to answer the call to transform the nation’s energy
and water landscape,” said Al Hodnik, ALLETE Chairman and CEO. “We
believe we have positioned U.S. Water Services for future success,
as well as ALLETE, as we expect continued growth through pursuing
additional opportunities in the clean energy space.”
“We at U.S. Water Services are grateful for the opportunities
provided by ALLETE and look forward to working closely with
Kurita’s team to further enhance the services and integrated
offerings we provide to our customers, while expanding our U.S.
market reach,” said U.S. Water Services CEO LaMarr Barnes.
A conference call to discuss additional details regarding the
transaction will be held on Feb. 8, 2019 beginning at 10 a.m.
Eastern time. ALLETE Chairman and CEO Al Hodnik will be joined on
the call by President Bethany Owen, Senior Vice President and Chief
Financial Officer Robert Adams and Vice President, Controller and
Chief Accounting Officer Steve Morris. Interested parties may
listen to the conference call by calling 877-303-5852, passcode
2992429 or by listening to a webcast on ALLETE’s web site at
www.allete.com. A replay of the call will be available
through Feb. 12, 2019 by calling 855-859-2056, passcode,
2992429. The webcast will be accessible for thirty days at
allete.com.
ALLETE, Inc. will announce its financial results for 2018 in a
press release before the stock markets open on Thursday, Feb. 14,
2019. Following the release, ALLETE, Inc. will discuss 2018 results
and 2019 earnings guidance during a conference call beginning at 10
a.m. Eastern time.
ALLETE is an energy company headquartered in Duluth, Minn. In
addition to its electric utilities, Minnesota Power and Superior
Water, Light and Power of Wisconsin, ALLETE owns ALLETE Clean
Energy, based in Duluth, BNI Energy in Bismarck, N.D., U.S. Water
Services headquartered in St. Michael, Minn., and has an eight
percent equity interest in the American Transmission Co. More
information about ALLETE is available at www.allete.com.
ALE-CORP
The statements contained in this release and statements that
ALLETE may make orally in connection with this release that are not
historical facts, are forward-looking statements. Actual results
may differ materially from those projected in the forward-looking
statements. These forward-looking statements involve risks and
uncertainties and investors are directed to the risks discussed in
documents filed by ALLETE with the Securities and Exchange
Commission.
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version on businesswire.com: https://www.businesswire.com/news/home/20190207005967/en/
Investor Contact:Vince Meyer218-723-3952vmeyer@allete.com
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