H2O Innovation Enters Definitive Agreement for Acquisition by Ember and Other Investors

Quebec City, Canada - H2O Innovation Inc., a leading water solutions company, has announced that it has signed a definitive agreement to be acquired by Ember SPV I Purchaser Inc., a private equity firm based in New York, alongside Investissement Québec (IQ), Caisse de dépôt et placement du Québec (CDPQ), and the management team of H2O Innovation. The transaction will see the Purchaser acquire all of the outstanding shares of H2O Innovation for $4.25 per share in cash.

Key Highlights:

- The acquisition price of $4.25 per share represents a 68% premium to the closing price on the Toronto Stock Exchange (TSX) on October 2, 2023.

- H2O Innovation's board of directors unanimously recommends that shareholders vote in favor of the transaction.

- Ember will leverage the expertise of H2O Innovation's management team to support the company's growth strategy.

- Ember is committed to maintaining H2O Innovation's head office and a substantial number of employees in Quebec.

- IQ and CDPQ, along with the key executives of H2O Innovation, will hold an equity interest of approximately 21% in the company post-transaction.

The acquisition values H2O Innovation at $395 million on a fully diluted equity basis. Ember will fund its portion of the purchase price with capital managed on behalf of its limited partners. The transaction is subject to court and shareholder approval and is expected to close in the fourth quarter of 2023.

H2O Innovation and Ember have taken measures to ensure a smooth transition to the new ownership, minimizing disruption for employees, customers, and partners. The acquisition will provide H2O Innovation with additional resources and support to continue its growth trajectory.

Lisa Henthorne, Chairwoman of the Board of H2O Innovation, commented on the transaction, stating, "After extensive work, we have concluded that this transaction is in the best interest of H2O Innovation and fair to our shareholders. We are pleased to have reached an agreement that provides immediate and fair value to our shareholders. Ember appreciates the significance of H2O Innovation's Québec roots and has agreed to maintain H2O Innovation's head office in the Province of Québec."

Frédéric Dugré, President, CEO, and co-Founder of H2O Innovation, expressed enthusiasm about the partnership with Ember, saying, "We are very excited to partner with Ember to accelerate growth. As a private equity firm investing in infrastructure solutions, Ember is the ideal partner for H2O Innovation."

Elena Savostianova, Managing Partner of Ember, expressed the firm's commitment to H2O Innovation's growth in the water solutions sector. She stated, "We look forward to partnering with the H2O Innovation management team to build a leading integrated water solutions company."

Investissement Québec and CDPQ, two prominent Québec-based institutions, expressed their support for the acquisition, highlighting H2O Innovation's importance as a growing company in a strategic sector of the economy.

The acquisition of H2O Innovation by Ember and its partners represents a significant development for the water solutions industry. With the support of Ember's expertise and resources, H2O Innovation is poised for continued growth and success.

About H2O Innovation:

H2O Innovation is a complete water solutions company focused on providing best-in-class technologies and services to its customers. The company's activities encompass water technologies and services, specialty products, and operation & maintenance. Through innovation, H2O Innovation aims to simplify water.

About Ember:

Ember is a private equity firm investing in businesses delivering infrastructure solutions that reduce carbon intensity, enhance resource efficiency, and increase resilience to climate impacts. With a focus on the energy transition, water, waste, and industrial sectors, Ember is committed to driving sustainable growth.

About Investissement Québec (IQ):

Investissement Québec's mission is to stimulate business innovation, entrepreneurship, and growth in investment and exports in Quebec. The corporation provides customized financial solutions and consulting services to businesses of all sizes. Through strategic partnerships, IQ aims to drive economic development.

About Caisse de dépôt et placement du Québec (CDPQ):

CDPQ is a global investment group managing funds for public pension and insurance plans. The organization invests across various sectors, including major financial markets, private equity, infrastructure, real estate, and private debt. CDPQ supports businesses that drive performance and progress.

Disclaimer: This press release does not constitute an offer to purchase or a solicitation of an offer to sell any securities. The transaction is subject to regulatory and shareholder approvals. Shareholders are advised to review the documents filed by the corporation for more information.

Source: H2O Innovation Inc. - www.h2oinnovation.com