Aqua America secured a $750 million investment from Canada’s national pension plan in its efforts to acquire a major group of gas companies in Pittsburgh, the Bryn Mawr-based water utility announced Friday.
The investment by the Canada Pension Plan Investment Board (CPPIB) is expected to close alongside the Peoples’ acquisition, which was announced in October 2018 in a deal valued at $4.275 billion, including absorbing about $1.3 billion of debt.
It’s a deal that will turn Aqua, the second largest water utility in the country after Camden-based American Water, into a combined utilities company operating both gas and water operations. Both Aqua and American Water have ramped up its acquisition activity in recent years, scooping up municipal water systems looking for help to pay for crucial infrastructure upgrades. Aqua’s purchase of Peoples has been billed as the first time a water utility has made a major deal to purchase a a gas utility.
“The acquisition of Peoples is a great strategic fit and aligns directly with our growth strategy and core competencies of building and rehabilitating infrastructure, timely regulatory recovery and operational excellence,” Aqua CEO Christopher Franklin said in a statement at the time the acquisition was announced.
CPPIB will received 21.7 million newly issued common stock shares as part of the deal, which is being financed with a mix of equity and debt. A CPPIB representative will also join Aqua’s board of directors.
“We are pleased to partner with Aqua America to support the revitalization of this key infrastructure. By acquiring Peoples, Aqua America will create a unique platform with a strong management team that is poised for further expansion,” CPPIB’s Senior Managing Director & Global Head of Active Equities Deborah Orida said in a statement.