H2O Innovation signs definitive agreement to be acquired by Ember alongside IQ, CDPQ and Management.

ENPNewswire-October 4, 2023--H2O Innovation signs definitive agreement to be acquired by Ember alongside IQ, CDPQ and Management

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Release date- 03102023 - H 2 O Innovation Inc. ('H 2 O Innovation ' or the 'Company') announces that it has entered into a definitive arrangement agreement (the 'Agreement Arrangement') with Ember SPV I Purchaser Inc. (the 'Purchaser'), an entity controlled by funds managed by Ember Infrastructure Management, LP ('Ember'), a private equity firm in New York, under the terms of which the purchaser will acquire all of the issued and outstanding ordinary shares of the capital of H 2 O Innovation (the 'shares'), except the shares which will be rolled over by Investissement Quebec ('IQ'), the Caisse de depot et placement du Quebec ('CDPQ') and the main members of the senior management of the Company (collectively, the 'Rolling Shareholders'), for an amount of $4.25 1 in cash (the 'Consideration') per Share (the 'Transaction').

Main highlights of the operation

Shareholders of H 2 O Innovation (the 'Shareholders') will receive a price of $4.25 per share, payable entirely in cash, representing a premium of approximately 68% to the closing price of the shares on Toronto Stock Exchange (the 'TSX') on October 2, 2023 2 , a premium of approximately 66 % to the 20-day volume weighted average trading price of the Shares on the TSX for the period ending October 2, 2023 and a 26 % premium to the 52-week high price on the TSX of $ 3.37 per share reached on July 4, 2023; The board of directors of H 2 O Innovation (the 'board') (excluding any director who is not authorized to vote) unanimously recommends that shareholders vote in favor of the transaction; Ember will leverage the expertise of the current management team led by Frederic Dugre, President, CEO and co-founder of H 2 O Innovation, to continue to support H 2 O Innovation 's growth strategy ; Ember has committed to retaining the Company's current key executive officers and to retaining H 2 O Innovation 's head office and substantially the same number of employees in the province of Quebec; Ember is partnering with IQ and CDPQ, leading Quebec institutions and significant shareholders of H 2 O Innovation who, along with key members of H 2 O Innovation 's senior management , will hold a total equity stake of 'approximately 21% in H 2 O Innovation after the operation.

The operation values ??H 2 O Innovation at 395 $M, after dilution of equity. Ember finances its portion of the acquisition price with capital that it manages on behalf of its limited partners through capital from a private investment fund and certain co-investors, including member funds of the same group than Ontario Power Generation Inc. Pension Fund. Pursuant to the terms of the Arrangement Agreement, the Company may solicit a superior offer during a defined 'solicitation period', as more fully described below, during which time Scotia Capital Inc. ('Scotiabank'), the Company's financial advisor, will approach potential interested parties with a view to soliciting a higher offer, which the purchaser has the right to match.

Ember and H 2 O Innovation have implemented appropriate measures to ensure a smooth ownership transition, with minimal disruption to H 2 O Innovation employees and the Company's many loyal customers and partners in Canada, the United States, Mexico and Europe.

'After extensive work, we have concluded that the transaction is in the best interest of H 2 O Innovation and fair for our shareholders. After a comprehensive evaluation and extensive negotiations with the buyer, we are pleased to have reached an agreement that provides immediate and fair value to our shareholders. In addition to the attractive bonus offered to H 2 O Innovation shareholders, Ember has agreed to key commitments to H 2 O Innovation and its stakeholders. Ember appreciates the importance of H 2 O Innovation's Quebec roots, which will remain an important foundation for the Company as it continues to grow, and has agreed to maintain H 2 O Innovation's head office2 O Innovation in the province of Quebec,' said Lisa Henthorne, chair of the board.

'We are very excited to partner with Ember to accelerate growth. We look forward to leveraging their relationships, resources and expertise as we execute our growth strategy in a manner consistent with our core values ??of loyalty, entrepreneurship, achievement and unity,' said said Mr. Dugre. 'As a private equity firm that invests in infrastructure solutions to reduce carbon intensity, increase resource efficiency and build climate resilience, Ember is the ideal partner for H 2 O Innovation . '

' Ember looks forward to working with the H 2 O Innovation management team to continue building a leading integrated water treatment solutions company focused on delivering industry-leading technologies and services. order to its clients,' said Elena Savostianova, Managing Partner at Ember. 'Sustainability is at the heart of Ember's investment philosophy, and water and wastewater solutions are at the heart of our sustainability thesis. While H 2 O Innovation has successfully delivered its services and solutions to its clients, both internally and through acquisition-driven growth since its inception, we see a unique opportunity for H 2 O Innovation to enter a new phase of growth supported by our capital and our sectoral expertise. We intend to take a long-term view as we support the continued implementation of H 2 O Innovation's...