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 HARRINGTON PARK, N.J., Sept. 16 /PRNewswire/ -- United Water Resources (NYSE: UWR), headquartered in Harrington Park, and GWC Corporation (NASDAQ: GWCC), based in Wilmington, Del., announced today they have entered into a definitive agreement to merge. The merger will form the second largest investor-owned water utility in the country, serving more than two million people in 14 states. United Water is the parent firm of Hackensack and Spring Valley Water companies. GWC is the parent of General Waterworks Corporation.
 Under the terms of the agreement, General Waterworks will become a wholly owned subsidiary of United Water through an exchange of common stock, convertible preference stock and cash. The total value of the transaction is approximately $200 million. Lyonnaise des Eaux-Dumez, the majority shareholder of GWC, will receive 70 percent of their consideration in common stock of United Water at a ratio of 1.2 shares of United Water to 1 share of GWC and the remaining 30 percent in convertible preference stock. The minority shareholders of GWC will receive 70 percent of their consideration in common stock of United Water at a ratio of 1.2 shares of United Water to 1 share of GWC, and will have a choice of taking the remaining 30 percent in either (i) cash equal to 1.2 times the average market price of United Water common stock on the New York Stock Exchange for 20 trading days prior to the closing, or(ii) an equivalent value of United Water convertible preference stock. The merger is expected to be tax free to the extent common shareholders of GWC receive common stock or preference stock of United Water.
 Robert A. Gerber, chairman, and Donald L. Correll, president and chief executive officer of United Water Resources, will continue to serve in these capacities in the merged company. Frank J. Pizzitola, chairman and president of GWC Corporation, will become an advisory director of United Water. Ronald S. Dungan will continue to serve as president of General Waterworks.
 Lyonnaise des Eaux-Dumez, a French multi-national corporation and one of Europe's largest water purveyors, currently owns approximately 82 percent of GWC shares. Lyonnaise supports the merger and will vote its shares for the merger in the same proportion as the minority shareholders of GWC. Under the terms of the merger, Lyonnaise will own approximately 26 percent of the outstanding United Water shares. Lyonnaise will enter into a 12-year Governance Agreement with United Water which, subject to certain conditions, will govern the relationship of the parties.
 The board of United Water Resources will be increased from 11 members to 15, adding four nominees of Lyonnaise -- Edward E. Barr, president and chief executive officer of Sun Chemical Corporation, Fort Lee, New Jersey; Allan R. Dragone, chairman of the New York Racing Association; Philippe Brongniart, executive vice president of Lyonnaise des Eaux-Dumez; and Jacques F. Petry, vice president of Lyonnaise des Eaux-Dumez.
 The merger is subject to various approvals including shareholders of both companies and certain state regulatory agencies, and is expected to close in the first quarter of 1994.
 Commenting on the merger, Correll said, "The combination of United Water Resources and General Waterworks creates an even stronger organization with industry-leading expertise in water purification processes and an excellent record of building and managing water facilities. It extends United Water's reach to a broad cross-section of the American population, including the high-growth markets of Jacksonville, Fla.; Boise, Idaho and Toms River, N.J.
 "We are doubling our size but more than doubling our growth opportunities, which is important to our shareholders. We will continue to target attractive acquisitions and contract utility services, and we expect that the merged company will have increased access in these areas. Our new collaborative relationship with Lyonnaise is a strategic alliance that will facilitate opportunities for joint ventures and enhanced research and development in water purification, both here and overseas.
 "The merger reinforces our commitment to our core utility business and provides a larger customer base to enhance our prospects for future earnings. United Water is proud of its century-plus record of uninterrupted dividends, and remains committed to its policy of periodically increasing them as earnings permit," Correll said.
 Frank J. Pizzitola added, "United Water Resources has an exceptional reputation in the water industry and has done a fine job of modernizing its water facilities infrastructure, which puts them ahead of the pack in meeting water quality regulations. The merger of the companies will benefit GWC's customers, employees and shareholders."
 Jerome Monod, chairman of Lyonnaise des Eaux-Dumez, stated that Lyonnaise views the merged company as an opportunity for expanded joint venturing and evidence of Lyonnaise's strong commitment to the United States water market.
 United Water Resources is the parent company of Hackensack Water Company and Spring Valley Water Company, which serve about one million people in northern New Jersey and southern New York. Other United Water subsidiaries are engaged in real estate development, environmental testing, the operation of small water and sewer utilities and the provision of contract services to the utility industry. United Water has approximately 700 employees.
 For the year ended Dec. 31, 1992, United Water reported net income of $15.8 million on operating revenues of $164.9 million. United Water has 19.6 million shares outstanding and approximately 18,000 registered shareholder accounts. In 1992, the company paid a dividend of 92 cents per share.
 GWC Corporation is the holding company for General Waterworks Corporation, which provides water service to a population of approximately one million people through 25 regulated utilities in 14 states. The company has 750 employees. Headquartered in King of Prussia, Pa., General Waterworks' eight largest utilities are located in: Boise; Rio Rancho, N.M.; Toms River; Jacksonville; New Rochelle, N.Y.; Wilmington; Harrisburg, Pa. and Pine Bluff, Ark.
 GWC Corporation had earnings of $11.6 million on total revenues of $116.7 million in the year ended Dec. 31, 1992. GWC has 11.1 million common shares outstanding, and paid a dividend of $1.00 per share in 1992.
 -0- 9/16/93
 /CONTACT: Carolyn Iglesias of United Water Resources, 201-767-2841, or evening and weekends: 201-487-0011/

CO: United Water Resources; GWC Corporation ST: New Jersey; Delaware IN: UTI SU: TNM

TS -- NY012 -- 2579 09/16/93 09:37 EDT
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Publication:PR Newswire
Date:Sep 16, 1993

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