Tear Sheet: H2O America

This report does not constitute a rating action. . On July 7, 2025, through its Texas Water Co. (TWC) subsidiary, the company agreed to acquire substantially all of Quadvest?s retail and wholesale water and sewer assets for a combined purchase price of about $540 million. HTO recently completed a $700 million equity raise ($300 million issued with a $400 million forward component), which reduces execution risk associated with the transaction. However, we expect near-term financial pressure as the company integrates Quadvest and absorbs elevated capital spending. TWC filed for fair market value treatment with the Public Utility Commission of Texas (PUCT) and independent appraisers' assessment supported the purchase price as fair market value. We will monitor the company?s expected rate

...April 9, 2026 This report does not constitute a rating action. The outlook on H2O America (HTO) remains negative pending the integration of Quadvest. On July 7, 2025, through its Texas Water Co. (TWC) subsidiary, the company agreed to acquire substantially all of Quadvest's retail and wholesale water and sewer assets for a combined purchase price of about $540 million. HTO recently completed a $700 million equity raise ($300 million issued with a $400 million forward component), which reduces execution risk associated with the transaction. However, we expect near-term financial pressure as the company integrates Quadvest and absorbs elevated capital spending. TWC filed for fair market value treatment with the Public Utility Commission of Texas (PUCT) and independent appraisers' assessment supported the purchase price as fair market value. We will monitor the company's expected rate case filing following acquisition close, with approval expected by mid-2026. We expect consolidated funds...

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