Razon-led Manila Water Co. Inc. is spending P1.15 billion to buy into the Laguna Water District Aquatech Resources Corp. (LARC), which oversees the water supply system of the Laguna Water District in the towns of Los Baños, Bay, Calauan, Victoria and Nagcarlan in the province.
Manila Water said its subsidiary Manila Water Philippine Ventures Inc. (MWPV) is spending P1.15 billion to acquire a combined 70 percent stake in Equipacific HoldCo Inc. (EHI) from three shareholders of the company.
EHI is an investment company that holds 90 percent of the outstanding shares of LARC, which is a joint venture with the Laguna Water District.
In a disclosure to the Philippine Stock Exchange, Manila Water said MWPV entered into a share purchase agreement (SPA) with three shareholders of EHI namely Equi-Parco Holdings Corp. (EPHC), Metropac Water Investments Corp. (MWIC) and TwinPeak Hydro Resources Corp. (TPHRC).
Under the SPA, MWPV will buy the shares of the three companies in EHI totaling 315.015 million shares at P3.65 per share.
EPHC and MWIC each sold their 30 percent interest in EHI while TPHRC sold its 10 percent stake.
Based on MWIC’s documents, the shareholders of EHI were EPCC at 56 percent, MWIC at 30 percent and THRC at 10 percent.
“The acquisition will allow Manila Water Philippine Ventures Inc. to establish a stronger foothold and strategically grow its water and wastewater supply operations in the Province of Laguna,” Manila Water said recently.
“Equipacific HoldCo Inc. will contribute to the earnings of Manila Water Philippine Ventures Inc.,” it added.
MWPV is Manila Water’s holding firm for all its domestic operating subsidiaries.
MWPV will pay the P920 million upon closing of the agreement while the balance of P230 million will be paid within six months after the closing date, subject to completion of post-closing obligations, Manila Water also said.
Manila Water is present in Laguna through its subsidiary Laguna Water which manages and operates the water services in the cities of Biñan, Santa Rosa and Cabuyao as well as in the municipality of Pagsanjan.
Laguna Water also has presence in other areas of Laguna such as Alaminos, Calamba, San Pablo, Sta. Cruz and Victoria.
With the acquisition of EHI, Manila Water said MWPV’s service coverage in Laguna is expected to expand to 27 percent from 21 percent.
“The acquisition will provide MWPV with the opportunity to optimize operational synergies with Laguna Water for the benefit of the customers in the province of Laguna,” said Barny Kim, Manila Water new business development head.