Consolidated Water Co. Ltd. Acquires Water Operations in British Virgin Islands, Barbados and Cayman
Consolidated Water Co. Ltd., which develops and operates seawater conversion plants and water distribution systems in areas of the world where naturally occurring supplies of potable water are scarce or nonexistent, has completed multiple acquisitions that have expanded the Company's water operations into the British Virgin Islands and Barbados and increased its presence in the Bahamas and the Cayman Islands.
Following the satisfaction of numerous conditions, including the receipt of certain governmental approvals, the acquisitions were completed for an aggregate purchase price of approximately $25.5 million, subject to adjustment based on audited year-end financial statements of the acquired companies. Separately, Consolidated has contracted to sell its non-voting stock in the British Virgin Islands company to a local group for $2.1 million.
Consolidated now has responsibility for the operation of additional water plants with a combined production capacity of approximately 8.0 million U.S. gallons per day (USGPD), bringing Consolidated's current total production capacity to approximately 10.9 million USGPD.
"As a result of these acquisitions, Consolidated is now producing and/or delivering desalinated water to customers in five Caribbean countries," observed Jeffrey Parker, Chairman and Chief Executive Officer of Consolidated Water Co. Ltd. "We also acquired the exclusive rights to distribute a line of highly efficient energy recovery systems to desalination plant operators throughout the Caribbean basin."
"These acquisitions conveyed to Consolidated a 12.7% equity interest in Waterfields Co. Ltd. ("Waterfields") that owns a seawater desalination plant in Nassau, Bahamas, together with an Engineering Services Agreement to operate the plant. We expect to complete our previously announced agreement to acquire a 13.5% ownership in Waterfields, together with a Management Services Agreement, from Bacardi & Company Limited, along with a tender offer made outside the United States for 64.7% of the remaining Waterfields shares, before the current quarter ends on March 31, 2003," continued Parker. "We expect the acquisitions to be immediately accretive to Consolidated's net income and earnings per share."
Financing for these acquisitions was provided by Bank of Nova Scotia through a $20 million (US) seven-year term loan, a $17.1 million (US) six-month bridge loan, and a $2 million (US) revolving line of credit. As a result of these transactions, Bank of Nova Scotia has replaced Royal Bank of Canada as Consolidated's primary lender. The Company intends to replace a portion of the bank financing in the future with debt, equity or hybrid financing, but does not currently have any agreements for such financing.