Connecticut Water Service — Merger or Acquisition (October 2018)
23 slides from Connecticut Water Service's merger presentation, Oct 24, 2018
Slide 1: An Ideal Combination: CTWS + SJW Group
An Ideal Combination CTWS + SJW Group October 2018An Ideal Combination CTWS + SJW Group October 2018
Slide 2: Forward Looking Statements
Forward Looking Statements 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,” “w
Slide 3: CTWS Board Unanimously Recommends Shareholders Vote the GREEN Proxy Card FOR the SJW Group Combination
CTWS Board Unanimously Recommends Shareholders Vote the GREEN Proxy Card “FOR” the SJW Group Combination Combination with SJW Group delivers a significant, certain premium of 33% to the unaffected 1 CTWS stock price , with the all-cash $70.00/share price exceeding CTWS’ unaffected all-time 1 2 high
Slide 4: Agenda
Agenda I. CTWS + SJW Group: An Ideal Combination II. Background to the Combination: Independent, Board-Led Process III. Conclusion 4Agenda I. CTWS + SJW Group: An Ideal Combination II. Background to the Combination: Independent, Board-Led Process III. Conclusion 4
Slide 5: CTWS + SJW Group: An Ideal Combination
CTWS + SJW GROUP: AN IDEAL COMBINATIONCTWS + SJW GROUP: AN IDEAL COMBINATION
Slide 6: Substantial Value Creation for CTWS Shareholders
Substantial Value Creation for CTWS Shareholders Significant, • $70.00 per share price delivers significant, certain value Certain, • All-cash consideration allows shareholders to realize immediate value and avoid market Immediate risk and share price volatility post-transaction Value 1 • $70.00 per
Slide 7: Consistent with Our Obligations and Responsibilities as a Regulated Utility Company
SJW Group Combination Consistent with Our Obligations and Responsibilities as a Regulated Utility Company — No changes in customer rates as a result of the combination — Commitment to make $200MM in annual capital investments across combined operations Customer — Existing superior customer service f
Slide 8: SJW Group's Offer Price Represents Unprecedented Value for CTWS Shareholders
SJW Group’s Offer Price Represents Unprecedented Value for CTWS Shareholders 1 CTWS Historical Share Price SJW Group Transaction: $70.00 $70.00 CTWS close price on $60.00 August 3, 2018: $62.85 $50.00 CTWS close price on March 14, 2018: $52.57 Last trading day prior to announcement of $40.00 origina
Slide 9: $70.00 Per Share Cash Offer Provides Certain, Significant, Premium Value
$70.00 Per Share Cash Offer Provides CTWS Shareholders With Certain, Significant, Premium Value $75.00 33% Premium to 10% Premium to CTWS Pre-Announcement of Original 2 Unaffected All-Time High 1 Transaction with SJW Group $70.00 $70.00 $65.00 $63.55 $60.00 $55.00 $52.57 $50.00 CTWS Price SJW Group
Slide 10: Highest Forward P/E Multiple for Any Public Utility Transaction Since 2016
SJW Group Transaction Would Represent Highest Forward 1 P/E Multiple for Any Public Utility Transaction Since 2016 32.0x 30.1x 28.0x 24.0x 2 Average: 23.4x 20.0x 16.0x SJW Group WGL / Avista / Vectren / Empire District / ITC / SCANA / Transaction AltaGas Hydro One CenterPoint Algonquin Fortis Domini
Slide 11: SJW Group + CTWS = Third-Largest Pure-Play U.S. Water Utility
SJW Group + CTWS = Third-Largest Pure-Play U.S. Water Utility 1 Investor-Owned Water Utilities by Enterprise Value ($B) $23.7 $8.8 $3.0 $2.7 $2.6 $1.8 $1.1 $0.9 $0.5 $0.5 2 AWK WTR Pro Forma CWT AWR SJW Group CTWS MSEX YORW ARTN.A 3 Investor-Owned Water Utilities by Rate Base ($B) $11.6 $4.1 $1.3 $1
Slide 12: Background to the Combination: Independent, Board-Led Process
BACKGROUND TO THE COMBINATION: INDEPENDENT, BOARD-LED PROCESSBACKGROUND TO THE COMBINATION: INDEPENDENT, BOARD-LED PROCESS
Slide 13: Process Led by an Experienced, Independent Board and CF&I Committee
Process Led by an Experienced, 1 Independent Board and CF&I Committee 1 The CF&I Committee Drove the Review of the SJW Group Proposal and Other Alternatives and Ultimately Led the Negotiations that Resulted in Three Significant Increases in Value for CTWS’ Shareholders Carol Wallace Richard Forde Br
Slide 14: Overview of CTWS + SJW Group Process Timeline
Overview of CTWS + SJW Group Combination April 5, 2018: July 2, 2018: August 6, 2018: Eversource submits Eversource submits CTWS and SJW Group June 2016: March 15, 2018: unsolicited, non-binding May 31, 2018: revised non-binding announce amended merger Initial approach by CTWS and SJW Group proposal
Slide 15: Results from a Comprehensive Process Designed to Deliver Superior Value
SJW Group Combination Results from a Comprehensive Process Designed to Deliver Superior Value to CTWS Shareholders Thorough, Disciplined Negotiations Resulted in Three Significant Price Increases for CTWS — June 2016: SJW Group approached CTWS about a potential merger-of-equals transaction — August
Slide 16: Results from a Comprehensive Process Designed to Deliver Superior Value
SJW Group Combination Results from a Comprehensive Process Designed to Deliver Superior Value to CTWS Shareholders — November 2017 – March 2018: The Board held eight meetings and the CF&I Committee held four meetings, directing management on negotiations with SJW Group Thorough Review of ◦ The Board
Slide 17: Results from a Comprehensive Process Designed to Deliver Superior Value
SJW Group Combination Results from a Comprehensive Process Designed to Deliver Superior Value to CTWS Shareholders — May 31, 2018: CTWS and SJW Group amended the merger agreement to include a go-shop provision permitting CTWS to actively solicit alternative transaction proposals over a 45-day period
Slide 18: Results from a Comprehensive Process Designed to Deliver Superior Value
SJW Group Combination Results from a Comprehensive Process Designed to Deliver Superior Value to CTWS Shareholders — June 29, 2018: Representatives of CTWS and Eversource met to clarify Eversource’s non-binding proposal, and during the meeting Eversource verbally indicated a revised proposal price o
Slide 19: Results from a Comprehensive Process Designed to Deliver Superior Value
SJW Group Combination Results from a Comprehensive Process Designed to Deliver Superior Value to CTWS Shareholders — July 2018 – August 2018: SJW Group approached CTWS about restructuring the MOE to an all-cash combination at $70.00/share to facilitate the closing of the companies’ combination and r
Slide 20: Conclusion
CONCLUSIONCONCLUSION
Slide 21: The CTWS Board Unanimously Believes the SJW Group Transaction Serves Shareholders' Best Interests
The CTWS Board Unanimously Believes the SJW Group Transaction Serves the Best Interests of CTWS Shareholders 1 Significant, certain premium of 33% to CTWS unaffected share price 2 Highly attractive NTM P/E multiple of 30.1x, which is at the top end of precedent, comparable transactions 3 $70.00 per
Slide 22: Transaction On-Track to Close in Q1 2019
Transaction On-Track to Close in Q1 2019 Q3 2018 Q4 2018 Q1 2019 Revised Merger Announcement (August 6, 2018) Filed Definitive Proxy (October 2, 2018) CTWS Special Shareholder Meeting (November 16, 2018) CPUC Order Instituting Investigation (OII initiated July 12, 2018; CPUC anticipates completion i
Slide 23: Additional Information and Where to Find It
Additional Information About the SJW Group Combination and Where to Find It Additional Information and Where to Find It This communication relates to the proposed acquisition of Connecticut Water by SJW Group. In connection with the proposed transaction, on October 2, 2018, Connecticut Water filed a
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