Sale proceeds to be reinvested in clean energy opportunities
ALLETE, Inc. (NYSE: ALE) has entered into a stock purchase agreement providing for the sale of U.S. Water Services, Inc. to Kurita Water Industries Ltd., headquartered in Tokyo, Japan, for $270 million. The purchase price is subject to adjustment at closing. The transaction is expected to close by the end of the first quarter 2019 upon receipt of regulatory approval.
Based in St. Michael, Minn. U.S. Water Services, was acquired by ALLETE in 2015. ALLETE said the sale announcement supports its 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,” ALLETE Chief Financial Officer Bob Adams said in a news release. “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 program.”
“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 energy space,” said ALLETE Chairman and CEO Al Hodnik.
ALLETE, Inc. will announce its 201 financial results on Thursday.