Sale proceeds to be reinvested in clean energy opportunities
DULUTH, Minn.--(BUSINESS WIRE)--Feb. 8, 2019--
ALLETE, Inc. (NYSE: ALE) today announced it has entered into a stock
purchase agreement providing for the sale of U.S. Water Services, Inc.
to Kurita Water Industries Ltd., a leading international water
management company headquartered in Tokyo, Japan, for $270 million. The
purchase price is subject to adjustment at closing, such as for changes
in working capital. The transaction is expected to close by the end of
the first quarter 2019 upon receipt of regulatory approval.
Based in St. Michael, Minnesota, U.S. Water Services, an integrated
water solutions company serves a diverse mix of approximately 5,000
customers to optimize system performance, reduce water and energy use,
and improve efficiency. It was acquired by ALLETE in 2015. Today’s
announcement supports ALLETE’s long-term diversification strategy that
includes expanding investments in clean energy opportunities with an
average annual earnings growth objective of five to seven percent.
“This sale exemplifies our disciplined approach to providing shareholder
value while executing on our multi-faceted strategy,” said ALLETE Chief
Financial Officer Bob Adams. “Our go-forward business mix provides
attractive opportunities to meet and potentially exceed our stated
average annual earnings growth target of five to seven percent while
supporting our strong credit ratings. Indeed, proceeds from the sale
will be primarily reinvested in growth initiatives at both our Regulated
Operations and ALLETE Clean Energy, reducing the need for equity
issuances that may otherwise arise. In addition, we will consider using
a portion of the proceeds to implement a common stock repurchase
Under ALLETE’s four year ownership and continued investment, U.S. Water
Services has grown significantly, becoming a world-class industrial
water service provider in North America through an aggressive expansion
in geography, end markets and service offerings. Enabling investments
included the acquisition of three water services companies over the past
“Kurita is a well-respected global enterprise, and this agreement is a
win-win for ALLETE and U.S. Water Services,” Adams said. “This action
will provide new opportunities for U.S. Water Services to expand and
grow the business, while enabling ALLETE to allocate capital resources
focused on growth initiatives within ALLETE and ALLETE Clean Energy,
which has become ALLETE’s second largest net income contributor.”
“LaMarr Barnes, his talented senior leadership team and committed U.S.
Water employees have been an important part of ALLETE’s corporate
history and family of companies delivering on our commitment to answer
the call to transform the nation’s energy and water landscape,” said Al
Hodnik, ALLETE Chairman and CEO. “We believe we have positioned U.S.
Water Services for future success, as well as ALLETE, as we expect
continued growth through pursuing additional opportunities in the clean
“We at U.S. Water Services are grateful for the opportunities provided
by ALLETE and look forward to working closely with Kurita’s team to
further enhance the services and integrated offerings we provide to our
customers, while expanding our U.S. market reach,” said U.S. Water
Services CEO LaMarr Barnes.
A conference call to discuss additional details regarding the
transaction will be held on Feb. 8, 2019 beginning at 10 a.m. Eastern
time. ALLETE Chairman and CEO Al Hodnik will be joined on the call by
President Bethany Owen, Senior Vice President and Chief Financial
Officer Robert Adams and Vice President, Controller and Chief Accounting
Officer Steve Morris. Interested parties may listen to the conference
call by calling 877-303-5852, passcode 2992429 or by listening to a
webcast on ALLETE’s web site at www.allete.com.
A replay of the call will be available through Feb. 12, 2019 by calling
855-859-2056, passcode, 2992429.The webcast will be accessible
for thirty days at allete.com.
ALLETE, Inc. will announce its financial results for 2018 in a press
release before the stock markets open on Thursday, Feb. 14, 2019.
Following the release, ALLETE, Inc. will discuss 2018 results and 2019
earnings guidance during a conference call beginning at 10 a.m. Eastern
ALLETE is an energy company headquartered in Duluth, Minn. In addition
to its electric utilities, Minnesota Power and Superior Water, Light and
Power of Wisconsin, ALLETE owns ALLETE Clean Energy, based in Duluth,
BNI Energy in Bismarck, N.D., U.S. Water Services headquartered in St.
Michael, Minn., and has an eight percent equity interest in the American
Transmission Co. More information about ALLETE is available at www.allete.com.
The statements contained in this release and statements that ALLETE
may make orally in connection with this release that are not historical
facts, are forward-looking statements. Actual results may differ
materially from those projected in the forward-looking statements. These
forward-looking statements involve risks and uncertainties and investors
are directed to the risks discussed in documents filed by ALLETE with
the Securities and Exchange Commission.
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Source: ALLETE, Inc.