Press release from CNW Group
Global Water announces sale of a majority interest in FATHOM? platform
Thursday, June 06, 2013
Global Water announces sale of a majority interest in FATHOM? platform07:00 EDT Thursday, June 06, 2013
PHOENIX, AZ, June 6, 2013 /CNW/ - GWR Global Water Resources Corp. ("GWRC") (TSX: GWR) today announced that Global Water Resources, Inc. ("Global Water" or the "Company") has sold a majority interest in its Smart Grid for Water Platform, FATHOM™. XPV Capital and other investors will acquire a majority interest in FATHOM™, through a partnership structure, and provide additional capital to fuel its growth, eliminating the need for further investment from Global Water.
The Company expects organic growth from the regulated utilities to accelerate through 2013 and anticipates the finalization of its utility rate proceeding in the first quarter of 2014. With a minority interest stake in FATHOM™ and the elimination of further capital requirements in FATHOM™ from Global Water; the Company will be able to reallocate returns in the best interest of the business and its shareholders. As part of this process the Company intends to consider the introduction of a dividend policy based on the ability of the regulated business to generate consistent positive and growing cash flows.
"It's the right time for the separation of the regulated business and FATHOM™. The fundamentals of our regulated business are very strong, stable and growing with the housing market recovery well underway in the Greater Phoenix Area and a rate case submission before the regulator," said Trevor Hill, President and CEO of Global Water. "XPV Capital is a natural partner with which to align ourselves as they have a unique and deep understanding of the water market and share our confidence in the future of FATHOM™. Our utility customers will continue to benefit from the FATHOM™ platform as we anticipate additional capital and scale will drive increased speed, functionality and platform enhancements for customers."
Under the terms of the partnership, Global Water will receive $5 million in cash at the time of closing and the potential to earn an additional $15 million based on certain performance criteria of the FATHOM™ business. Global Water will invest $1.5 million into FATHOM™ for a minority stake in the business and will also continue to utilize FATHOM™ services within its regulated business under a 10-year services contract. The Company will have a seat on the FATHOM™ Technical Advisory Council, which will participate in the visioning and technology road map that FATHOM™ will bring to the sector. The FATHOM™ and Utility-to-Utility™ brand will be maintained within the partnership.
Changes to Management
Trevor Hill, President and CEO of GWRC and Global Water will ultimately move to the role of Chairman of GWRC and Global Water. Effective at closing, he has also assumed the role of Executive Chairman of FATHOM™.
About GWR Global Water Resources Corp and Global Water
GWR Global Water Resources Corp. owns an approximate 48.1% interest in Global Water, a pure-play, high growth, water resources company located in Phoenix Arizona that owns and operates regulated water, wastewater and recycled water utilities.
Cautionary Note Regarding Forward-Looking Statements
This press release includes certain forward-looking statements. These forward looking statements include, but are not limited to our plans, objectives, expectations and intentions, and other statements contained in this release that are not historical facts as well as statements identified by words such as "expects", "anticipates", "intends", "plans", "believes", "seeks", "estimates", or the negative of these terms, or other words of similar meaning. These statements are based on our current beliefs or expectations and are inherently subject to significant uncertainties and changes in circumstances, many of which are beyond our control. Actual results may differ materially from these expectations due to changes in global political, economic, business, competitive, market and regulatory factors and other factors discussed under the heading "Risk Factors" in the Company's most recent Annual Information Form. We undertake no obligation to publicly update any forward-looking statement, except as required by law, whether as a result of new information, future developments or otherwise.
SOURCE: GWR Global Water Resources Corp.
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