GEORGE TOWN, Cayman Islands, B.W.I., Dec. 17, 2002 -- Consolidated Water Co. Ltd. Tuesday announced that it has entered into an agreement to acquire a 13.5% interest in Waterfields Co. Ltd. from Bacardi & Co.
Completion of the Bacardi transaction is subject to certain conditions, including governmental approvals. Waterfields operates a seawater desalination plant in Nassau, Bahamas.
The Bacardi agreement is consistent with a series of previously announced definitive agreements to acquire interests in several companies that would expand Consolidated's water operations into the British Virgin Islands and Barbados and increase its presence in the Cayman Islands and the Commonwealth of the Bahamas.
When combined with the company's agreement to acquire DesalCo Limited, the Bacardi transaction will give Consolidated a 26.2% ownership of Waterfields. The company will pursue a tender offer for the remaining shares in Waterfields, and completion of the Bacardi transaction is contingent upon Consolidated acquiring approximately 25.4% of Waterfields' outstanding shares through the tender offer.
"This agreement with Bacardi represents a very important step towards the completion of previously announced transactions that will more than triple our water production capacity and increase the company's annualized revenues by almost 90%," stated Jeffrey Parker, Chairman and Chief Executive Officer of Consolidated. "We also expect the combined acquisitions to be accretive to earnings per share immediately upon completion of the transactions."
The total production capacity of the water plants being acquired in the various transactions approximates 8.0 million U.S. gallons per day (USGPD), which would bring Consolidated Water's total production capacity to 10.9 million USGPD. Combined revenues of the five companies being acquired, after elimination of inter-company sales, totaled $8.6 million for the year ended December 31, 2001 and $3.7 million for the six months ended June 30, 2002. The aggregate purchase price for all of the proposed acquisitions should approximate $34 million, assuming that Consolidated's tender offer for the remaining Waterfields shares results in the company owning 100% of the Nassau, Bahamas operation.
On a pro-forma basis, the combined revenues of Consolidated and the companies being acquired would have approximated $19.5 million in the year ended December 31, 2001 and $10.0 million in the first half of 2002. Such combined revenues would represent a 77% increase over Consolidated's reported revenues for 2001 and a 59% increase over Consolidated's reported revenues for the first half of 2002, while increasing the company's water production capacity by approximately 276%.
The company has obtained a commitment from a bank to provide the financing required to complete the proposed acquisitions. Management intends to replace a portion of the bank financing in the future with debt, equity or hybrid financing. The company presently does not have any agreements for such financing. The completion of the proposed acquisitions is subject to the satisfaction of certain conditions, including the receipt of certain governmental approvals. As a result, the company can provide no assurances that the proposed acquisitions will be completed. The company's investment banker, Janney Montgomery Scott LLC, advised the company with respect to the acquisitions and the bank financing.
Consolidated is engaged in the development and operation of seawater conversion plants and water distribution systems in areas of the world where naturally occurring supplies of potable water are scarce or nonexistent. It currently operates a public water utility in certain areas of the Cayman Islands under a 20-year exclusive license from the Government of the Cayman Islands. The company also operates reverse osmosis seawater conversion facilities on Ambergris Caye off the mainland of Belize, and in the Commonwealth of the Bahamas.
The common stock of Consolidated is traded on the Nasdaq National Market under the symbol "CWCO". Additional information on the company is available on its website at http://www.consolidated-water.com .
