(Reuters) – SouthWest Water Co (SWWC.O) said it agreed to be acquired by institutional investors for $11 per share, or about $275 million, in cash, taking the water treatment company private.
SouthWest, which provides water production and wastewater treatment services, said investors advised by J.P. Morgan Asset Management and Water Asset Management LLC will buy the company.
The deal represents a 56 percent premium to the stock’s closing price on Tuesday and has an enterprise value of about $427 million, after taking into account the company’s outstanding debt, SouthWest said.
JP Morgan Asset Management is the investment arm of JPMorgan Chase (JPM.N) and has about $1.5 trillion assets under supervision.
Water Asset Management, the third largest shareholder of SouthWest, is a water industry focused investment firm.
SouthWest said the investors were “experienced in owning and operating water and other regulated utilities.”
The offer also calls for a near-term cash injection of $16 million prior to the closing of the transaction. SouthWest will issue 2.7 million shares at $6.00 per share in a private placement.
Water Asset Management said the partnership is committed to funding necessary maintenance and upgrades over the long-term.
Wells Fargo Securities LLC acted as financial advisor to SouthWest’s special board committee in exploring strategic alternatives.
Macquarie Capital (USA) Inc acted as financial advisor to the investors.
SouthWest shares, which have gained almost 50 percent in the last 6 months, closed at $7.07 Tuesday on Nasdaq. (Reporting by A.Ananthalakshmi in Bangalore; Editing by Gopakumar Warrier)