H2O AMERICA Material Event - Verified 8-K Summary

Event Description (what happened)

H2O AMERICA is making a significant move to expand its presence in Texas. The company is moving forward with its acquisition of Quadvest Retail and Quadvest Wholesale, two entities that together operate a substantial water and sewer utility business serving communities across the state.

This 8-K filing provides crucial audited financial statements for Quadvest for the years ended December 31, 2025, 2024, and 2023. Regulators require these detailed financials for large acquisitions, giving investors a clear view of the businesses H2O AMERICA is acquiring.

This strategic acquisition will significantly expand H2O AMERICA's footprint and market share in the Texas water and sewer utility sector. It also aims to consolidate operations and create synergies with existing Texas subsidiaries, such as SJWTX, Inc. and Texas Water Operation Services, LLC.

Event Date/Timeline

H2O AMERICA signed the initial agreements to acquire Quadvest Retail and Quadvest Wholesale on July 7, 2025. The company filed this 8-K report on March 2, 2026, to disclose Quadvest's required audited financial statements.

The acquisition faces several closing conditions. These primarily include obtaining regulatory approvals from the Public Utility Commission of Texas (PUCT) and other local authorities, along with securing necessary financing. H2O AMERICA expects both the retail and wholesale acquisitions to close simultaneously in mid-2026.

Impact Assessment (who/what is affected)

This acquisition marks a significant expansion for H2O AMERICA, boosting its customer base by over 30,000 connections and enhancing its operational scale.

• Employees: Quadvest Retail and Quadvest Wholesale employees will likely transition to H2O AMERICA. They may experience changes in roles, benefits, and company culture during the integration process.
• Customers: H2O AMERICA's subsidiaries (SJWTX, Inc. and Texas Water Operation Services, LLC) will eventually serve current Quadvest customers. This transition could bring changes in billing, customer service platforms, and potential future infrastructure improvements or rate adjustments, all subject to regulatory approval.
• Investors: This initiative represents a major growth opportunity for investors, involving substantial investment and a potential increase in debt. If successful, it could significantly boost H2O AMERICA's long-term value and earnings per share through increased scale, geographic concentration, and operational efficiencies. However, it also carries risks, including integration challenges, regulatory delays, and the potential difficulty in realizing expected synergies.
• Other Stakeholders: Local communities currently served by Quadvest will gain H2O AMERICA as their water and sewer provider. This could lead to new infrastructure investments and influence local services and development.

Financial Impact (if applicable)

H2O AMERICA will acquire Quadvest Retail and Quadvest Wholesale for a base consideration of $540 million. This breaks down to $483.6 million for the retail business and $56.4 million for the wholesale business. The company plans to finance the acquisition using a combination of cash on hand, existing credit facilities, and potentially new debt, which will affect H2O AMERICA's balance sheet.

Quadvest's audited financial statements show:

• Revenue: Approximately $45 million in 2025 and $38 million in 2024.
• Net Income: Around $8 million in 2025.

H2O AMERICA anticipates the acquisition will generate $8-10 million in annual synergies through operational efficiencies and shared resources.

Key Takeaways for Investors

• Strategic Growth: This acquisition highlights H2O AMERICA's aggressive growth strategy, specifically targeting expansion within the Texas utility market.
• Financial Contribution: The acquired Quadvest businesses generated approximately $45 million in revenue and $8 million in net income in 2025. This provides a clear baseline for their future contribution to H2O AMERICA's performance.
• Investment & Debt: The $540 million acquisition price is substantial and will increase the company's debt. However, H2O AMERICA views it as an investment to expand its core utility business and strengthen market dominance.
• Risks & Opportunities: While the acquisition offers potential for long-term value and earnings growth, investors should consider associated risks. These include integration costs and complexities, potential regulatory delays, increased leverage from financing, and the challenge of achieving projected synergies.
• Monitoring Points: Investors should watch for the official closing announcement (expected mid-2026), updates on regulatory approvals, details on the financing structure, and future earnings reports. These will show how the Quadvest businesses impact H2O AMERICA's financial results and how integration progresses.