News release H2O Innovation

H2O Innovation signs definitive agreement to be acquired by Ember alongside IQ, CDPQ and Management

Private Equity, Québec Québec City,

(TSX: HEO) – H2O Innovation Inc. (“H2O Innovation” or the “Corporation”) announces that it has entered into a definitive arrangement agreement (the “Arrangement Agreement”) with Ember SPV I Purchaser Inc. (the “Purchaser”), an entity controlled by funds managed by Ember Infrastructure Management, LP (“Ember”), a New York-based private equity firm, whereby the Purchaser will acquire all of the issued and outstanding common shares in the capital of H2O Innovation (the “Shares”), other than the Shares to be rolled over by Investissement Québec (“IQ”), Caisse de dépôt et placement du Québec (“CDPQ”) and the key executives of the Corporation (collectively, the “Rollover Shareholders”), for $4.25 in cash (the “Consideration”) per Share (the “Transaction”).

Key Transaction Highlights

  • The shareholders of H2O Innovation (the “Shareholders”) will receive a price of $4.25 per Share, payable entirely in cash, which represents a premium of approximately 68% to the closing price of the Shares on the Toronto Stock Exchange (the “TSX”) on October 2, 2023 , a premium of approximately 66% to the 20-day volume-weighted average Share price on the TSX for the period ending on October 2, 2023, and a 26% premium to the 52-week high price on the TSX of $3.37 per Share achieved on July 4, 2023;
  • H2O Innovation’s board of directors (the “Board”) (excluding any director not entitled to vote) unanimously recommends that Shareholders vote in favour of the Transaction;
  • Ember will leverage the expertise of the existing management team led by Frédéric Dugré, President, Chief Executive Officer and co-Founder of H2O Innovation, to continue to support H2O Innovation’s growth strategy;   
  • Ember is committed to continue employing the Corporation’s current key executives and maintaining H2O Innovation’s head office and substantially the same number of employees in the Province of Québec; and
  • Ember is partnering with IQ and CDPQ, important Québec-based institutions and significant Shareholders of H2O Innovation, that together with the key executives of H2O Innovation will, in the aggregate, hold an equity interest of approximately 21% in H2O Innovation post-Transaction.

The Transaction values H2O Innovation at $395 million, on a fully diluted equity basis. Ember is funding its portion of the purchase price with capital it manages on behalf of its limited partners via private equity fund capital as well as select co-investors, including funds affiliated with the Ontario Power Generation Inc. Pension Fund. Under the terms of the Arrangement Agreement, the Corporation may solicit a superior offer for a defined “go-shop” period, as further outlined below, during which Scotia Capital Inc. (“Scotiabank”), the Corporation’s financial advisor, will approach potential interested parties with a view to soliciting a higher offer, which the Purchaser is entitled to match.

Ember and H2O Innovation have put in place appropriate measures to ensure a seamless transition to the new ownership, with minimal disruption for the employees of H2O Innovation, and the Corporation’s numerous loyal customers and partners across Canada, the United States, Mexico and Europe.

“After extensive work we have concluded that this transaction is in the best interest of H2O Innovation and fair to our Shareholders. Following a comprehensive assessment and our extensive negotiations with the Purchaser, we are pleased to have reached an agreement that provides immediate and fair value to our Shareholders. In addition to the attractive premium offered to H2O Innovation’s Shareholders, Ember has agreed to key commitments for H2O Innovation and its stakeholders. Ember appreciates the significance of H2O Innovation’s Québec roots that will remain an important foundation for the Corporation as it continues its growth, and has agreed to maintain H2O Innovation’s head office in the Province of Québec,” said Lisa Henthorne, Chairwoman of the Board.

“We are very excited to partner with Ember to accelerate growth. We look forward to leveraging their relationships, resources, and expertise as we execute on our growth strategy in a manner consistent with our core values of loyalty, entrepreneurship, achievement and unity,” stated Mr. Dugré. “As a private equity firm investing in infrastructure solutions to reduce carbon intensity, increase resource efficiency, and enhance climate resilience, Ember is the ideal partner for H2O Innovation”.

“Ember looks forward to partnering with the H2O Innovation management team to continue building a leading integrated water solutions company focused on providing best-in-class technologies and services to its customers,” declared Elena Savostianova, Managing Partner of Ember. “Sustainability is core to Ember’s investment philosophy, and water and wastewater solutions are central to our sustainability thesis. While H2O Innovation has achieved significant success in delivering its services and solutions to its customers both organically and through acquisition-driven growth since its inception, we see a unique opportunity for H2O Innovation to enter a new phase of growth supported by our capital and industry expertise. We intend to take a long-term view as we support the ongoing implementation of H2O Innovation’s existing strategy, while continuing to find additional opportunities to better serve its customers.”

Guy LeBlanc, President and CEO of IQ, added: “Investissement Québec supports Ember as a partner of choice to help H2O Innovation on its growth journey. It is committed to maintaining Québec operations and leveraging H2O Innovation’s expertise to make it a consolidator and global leader in its field. This investment project is part of our mission to drive economic development.”

“As a long-time shareholder, CDPQ is pleased to continue its partnership with H2O Innovation, a growing company operating in a strategic sector of our economy,” said Kim Thomassin, Executive Vice President and Head of Québec at CDPQ. “With this privatization, the Corporation will be able to continue executing its acquisition plan while maintaining its infrastructure and talent in Québec.”

The process and negotiation of the Transaction were supervised by a committee of independent directors of H2O Innovation (the “Special Committee”). The Transaction has been approved unanimously by the Board (with interested and non-independent directors abstaining from voting) following the unanimous recommendation of the Special Committee. Both the Board and the Special Committee determined, after receiving financial and legal advice, that the Transaction is in the best interests of the Corporation and is fair to the Shareholders (other than the Rollover Shareholders). The Board also unanimously recommends that the Shareholders vote in favour of the Transaction at the special meeting of Shareholders to be called to approve the Transaction (the “Meeting”).

As part of the Transaction, IQ, the largest shareholder of the Corporation, has agreed to roll over all of its Shares and increase its existing equity ownership in the Corporation by acquiring approximately $20 million of additional Shares from the Purchaser for an amount per Share equal to the Consideration. Furthermore, CDPQ has agreed to roll over the majority of its Shares and the key executives of H2O Innovation have agreed to roll over a portion of their Shares for an amount per Share equal to the Consideration. Upon completion of the Transaction, Ember will be the controlling shareholder of H2O Innovation, with IQ, CDPQ and the key executives of H2O Innovation, together, holding an equity interest in the Corporation of approximately 21%.

The Rollover Shareholders and each other director and officer of the Corporation, who currently collectively hold approximately 24% of all issued and outstanding Shares, have entered into customary support and voting agreements pursuant to which they have agreed to vote all their Shares in favour of the Transaction at the Meeting, subject to certain conditions.

Fairness Opinions and Formal Valuation

Desjardins Capital Markets (“Desjardins”), the independent financial advisor to the Special Committee, has delivered to the Special Committee a formal valuation of the Shares completed under the supervision of the Special Committee, as required by Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”), which determined that as at October 3, 2023 and based upon and subject to the assumptions, limitations and qualifications communicated to the Special Committee by Desjardins and to be contained in Desjardins’ written formal valuation, the fair market value of the Shares is in the range of $3.25 to $4.00 per Share.

Scotiabank, the Corporation’s exclusive financial advisor, and Desjardins have also each provided an opinion to the Special Committee and the Board that as at October 3, 2023, subject to the assumptions, qualifications and limitations communicated to the Special Committee and the Board and to be set out in each of Scotiabank’s and Desjardins’ written fairness opinion, the Consideration is fair, from a financial point of view, to the Shareholders (other than the Rollover Shareholders in respect of their Shares being rolled over).

The formal valuation and both fairness opinions will be included in the management information circular to be mailed to the Shareholders in connection with the Meeting and filed by the Corporation under its profile on SEDAR+ at and made available on the Corporation’s website at

Additional Transaction Details

The Transaction will be implemented by way of statutory plan of arrangement under the Canada Business Corporations Act and is subject to court approval, after considering the procedural and substantive fairness of the Transaction, and the approval of at least 66 2/3% of the votes cast by Shareholders present in person or by proxy at the Meeting. The Transaction is also subject to approval by holders of more than 50% of the votes cast by H2O Innovation’s minority Shareholders, being all Shareholders excluding the Rollover Shareholders and any of their respective affiliates, present in person or by proxy at the Meeting, in accordance with MI 61-101.

Pursuant to the Arrangement Agreement, H2O Innovation has a 30-day go-shop period that will extend from October 3, 2023 to November 2, 2023 (the “Go-Shop Period”), during which Scotiabank will solicit third-party interest in submitting a proposal which is superior to the proposal made by the Purchaser. The Purchaser will have a right to match a superior proposal during and after the Go-Shop Period. There can be no assurance that the go-shop process will result in a superior proposal. H2O Innovation does not intend to disclose developments with respect to the go-shop process unless and until the Board makes a determination requiring further disclosure.

After the expiry of the Go-Shop Period, H2O Innovation will be subject to a non-solicitation covenant with customary “fiduciary out” provisions under the terms of the Arrangement Agreement. The Arrangement Agreement contains other customary representations, warranties, covenants and closing conditions. The Transaction is not subject to any financing condition and is expected to close in the fourth quarter of 2023.

Upon closing of the Transaction, Ember intends to cause the Shares to be delisted from the TSX and Euronext Growth Paris and to be withdrawn from the OTCQX designation, and to cause the Corporation to submit an application to cease to be a reporting issuer under applicable Canadian securities laws.

Additional details regarding the terms and conditions of the Transaction, the rationale for the recommendations made by the Special Committee and the Board, the fairness opinions and the formal valuation, and how Shareholders can participate in and vote at the Meeting, will be set out in H2O Innovation’s management information circular to be prepared and made available to Shareholders in connection with the Meeting on SEDAR+ at and on the Corporation’s website at Copies of the Arrangement Agreement, the voting and support agreements, the management information circular and proxy materials in respect of the Meeting will be filed by the Corporation under its profile on SEDAR+ at


Norton Rose Fulbright Canada LLP is H2O Innovation’s legal counsel, Weil, Gotshal & Manges LLP and Davies Ward Phillips & Vineberg LLP are legal counsel to Ember, Fasken Martineau DuMoulin LLP is legal counsel to IQ and Blake, Cassels & Graydon LLP is legal counsel to CDPQ. Scotiabank acted as exclusive financial advisor to H2O Innovation and Desjardins acted as independent financial advisor to the Special Committee. Raymond James acted as financial advisor to Ember.

No Prospectus (France)

The Transaction will not imply a prospectus requiring the approval of France’s Autorité des marchés financiers.

All amounts are in Canadian dollars

About H2O Innovation

Innovation is in our name, and it is what drives the organization. H2O Innovation is a complete water solutions company focused on providing best-in-class technologies and services to its customers. The Corporation’s activities rely on three pillars: i) Water Technologies & Services (WTS) applies membrane technologies and engineering expertise to deliver equipment and services to municipal and industrial water, wastewater, and water reuse customers, ii) Specialty Products (SP) is a set of businesses that manufacture and supply a complete line of specialty chemicals, consumables and engineered products for the global water treatment industry, and iii) Operation & Maintenance (O&M) provides contract operations and associated services for water and wastewater treatment systems. Through innovation, we strive to simplify water. For more information, visit

About Ember

Ember is a private equity firm investing in businesses delivering infrastructure solutions that reduce carbon intensity, enhance resource efficiency, and increase resilience to climate impacts. Headquartered in New York City, Ember invests across the energy transition, water, waste and industrial sectors. For more information, please visit

About CDPQ

At CDPQ, we invest constructively to generate sustainable returns over the long term. As a global investment group managing funds for public pension and insurance plans, we work alongside our partners to build enterprises that drive performance and progress. We are active in the major financial markets, private equity, infrastructure, real estate and private debt. As at June 30, 2023, CDPQ’s net assets totalled CAD 424 billion. For more information, visit, consult our LinkedIn or Instagram pages, or follow us on X.

CDPQ is a registered trademark owned by Caisse de dépôt et placement du Québec and licensed for use by its subsidiaries.

About IQ

Investissement Quebec’s mission is to play an active role in Quebec’s economic development by stimulating business innovation, entrepreneurship and business acquisitions, as well as growth in investment and exports. Operating in all of the province’s administrative regions, the Corporation supports the creation and growth of businesses of all sizes with investments and customized financial solutions. It also assists businesses by providing consulting services and other support measures, including technological assistance available from Investissement Québec – CRIQ. In addition, through Investissement Québec International, the Corporation prospects for talent and foreign investment, and assists Quebec businesses with export activities.

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