8-KRegulation FDOther EventsExhibits & Filings

American Water Works Company, Inc. 8-K Report, Regulation FD Disclosure (Jun 4, 2018)

Filed June 4, 2018For Securities:AWK

Summary

American Water Works Company, Inc. (AWK) announced on June 4, 2018, through a press release, the completion of its acquisition of Nicor Energy Services Company, doing business as Pivotal Home Solutions (“Pivotal”). Pivotal, acquired by AWK's subsidiary AWE, is a provider of home warranty protection products and services. The total cash consideration for this acquisition was approximately $363.7 million, which includes the adjusted purchase price and estimated closing working capital. This strategic acquisition expands AWK's service offerings into a complementary market, potentially diversifying revenue streams beyond traditional utility services. To help finance this acquisition, AWK has elected to fully settle forward sale agreements for its common stock. By June 7, 2018, the company will deliver 2,320,000 shares of its common stock to forward purchasers, receiving approximately $183.3 million in net proceeds before offering expenses. This indicates a dual approach to funding the acquisition, combining cash and equity issuance to manage its capital structure.

Key Highlights

  • 1AWK, through its subsidiary AWE, has completed the acquisition of Pivotal Home Solutions for approximately $363.7 million in cash.
  • 2Pivotal Home Solutions specializes in home warranty protection products and services, representing a diversification for American Water.
  • 3The acquisition was funded partly by the physical settlement of forward sale agreements for 2,320,000 shares of AWK common stock.
  • 4AWK expects to receive approximately $183.3 million in net proceeds from the stock settlement by June 7, 2018.
  • 5The transaction was conducted under a Stock Purchase Agreement dated April 11, 2018.
  • 6Pivotal's legal name will be changed to Pivotal Home Solutions Co. on or about June 4, 2018.

Frequently Asked Questions

American Water Works Company, Inc., through its subsidiary AWE, acquired Nicor Energy Services Company, d.b.a. Pivotal Home Solutions. Pivotal provides home warranty protection products and services. The acquisition diversifies AWK's business beyond traditional utility operations and into a related service sector.

The acquisition was financed through a combination of cash and equity. Approximately $363.7 million was paid in cash at closing. Additionally, AWK is settling forward sale agreements by delivering 2,320,000 shares of its common stock, expecting to receive about $183.3 million in net proceeds to partially fund the purchase.

AWK will issue 2,320,000 shares of its common stock in exchange for approximately $183.3 million in net proceeds before offering expenses. This reduces the cash outflow required for the acquisition and increases the company's outstanding shares.

The acquisition was completed on June 4, 2018, with the press release announcing the completion also filed on this date.