H2O Innovation Shareholders Urged to Vote FOR Plan of Arrangement

H2O Innovation Inc. is pleased to announce that leading independent proxy voting and corporate governance advisory firms, Institutional Shareholder Services (ISS) and Glass, Lewis & Co. (Glass Lewis), have recommended shareholders of H2O Innovation to vote FOR the proposed acquisition by Ember SPV I Purchaser Inc. The acquisition involves the purchase of all issued and outstanding common shares in H2O Innovation, other than the shares to be rolled over by certain key executives and Investissement Québec, Caisse de dépôt et placement du Québec. The shareholders are set to receive C$4.25 in cash per share through a statutory plan of arrangement under the Canada Business Corporations Act.

ISS and Glass Lewis are highly respected firms that provide recommendations influencing the voting decisions of institutional shareholders, investment managers, pension funds, and mutual funds. Their endorsement of the Plan of Arrangement signifies their confidence in the transaction and its potential benefits for shareholders.

In its report, ISS referred to the “credible valuation” and the “reasonable procedural safeguards” implemented as part of the arrangement. It also cautioned about the potential downside risks if the arrangement is not approved. ISS recognized that the cash offer provides a substantial premium of 69.3 percent over the unaffected closing price of H2O Innovation shares on the Toronto Stock Exchange. Additionally, ISS noted that the Corporation’s “go-shop” process, which involved contacting numerous strategic parties and financial sponsors, failed to generate a superior proposal.

Glass Lewis echoed similar sentiments, stating that the proposed transaction offers a favorable outcome for public shareholders and an attractive opportunity to realize full value and immediate liquidity.

Based on their comprehensive assessments of the Plan of Arrangement, both ISS and Glass Lewis concluded that shareholder approval of the transaction is warranted.

Shareholders of H2O Innovation are strongly encouraged to vote FOR the Arrangement well in advance of the deadline on November 24, 2023, at 10 a.m. (Montreal time). The completion of the Arrangement is contingent upon customary closing conditions, including obtaining necessary approvals from the shareholders at a special meeting virtually held on November 28, 2023, and receiving the final order from the Superior Court of Québec. The Corporation anticipates that the Arrangement will be completed in the fourth quarter of 2023.

For more information about the Meeting and related materials, shareholders can refer to the Management Information Circular (the “Circular”) available on the Corporation’s profile on SEDAR+ at www.sedarplus.ca, as well as on www.H2OVote.com and www.h2oinnovation.com.

H2O Innovation has engaged Kingsdale Advisors as its strategic shareholder and communications advisor. Shareholders with questions or in need of assistance for voting can contact Kingsdale Advisors via phone, text, email, or live chat through www.H2OVote.com.

It is important to note that forward-looking statements included in this communication and related materials may involve uncertainties and risks that could cause actual results to differ materially. These statements are made based on certain material assumptions and are subject to inherent uncertainties, including but not limited to regulatory approvals, shareholder and court approvals, termination fees, litigation, market conditions, and the achievement of anticipated benefits. The Corporation advises shareholders to carefully review the risk factors outlined in the Annual Information Form dated September 27, 2023, available on SEDAR+.

H2O Innovation is a complete water solutions company driven by innovation. The Corporation focuses on providing best-in-class technologies and services in three main areas: Water Technologies & Services (WTS), Specialty Products (SP), and Operation & Maintenance (O&M). Through its dedication to innovation, H2O Innovation aims to simplify water solutions.

In conclusion, the recommendation from leading proxy voting and governance firms ISS and Glass Lewis to vote FOR the Plan of Arrangement highlights their endorsement of the proposed acquisition. Shareholders are reminded to cast their votes well in advance of the deadline and to review all relevant materials before making an informed decision. The completion of the Arrangement is anticipated in the fourth quarter of 2023, subject to necessary approvals and conditions.