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Just Energy Group to acquire home water filtration systems provider

Just Energy Group Inc. agreed to acquire Filter Group Inc., a provider of home water filtration systems, to diversify its product mix with noncommodity product and service offerings.

Under the agreement, Just Energy will pay C$15 million in cash, assume approximately C$22 million of third-party Filter Group debt and make earn-out payments of up to 9.5 million Just Energy shares on the achievement of certain performance-based milestones in the first three years following deal closing. The company may also issue an additional 2.4 million shares as earn-out payment to satisfy dividends that would have been paid in cash.

"[T]he earn-out structure has been designed so that the majority of the purchase price becomes payable only in the event that Filter Group is able to deliver on predetermined growth targets that would see significant value created for Just Energy shareholders and is expected to be immediately accretive to Just Energy's Base [funds from operations]," said Just Energy President and CEO Patrick McCullough.

Ontario-headquartered Filter Group has over 30,000 customers to date in Ontario and Manitoba in Canada, and in Arizona, California, Illinois, Michigan and Nevada in the U.S.

The transaction is expected to close by Oct. 1, subject to the satisfaction or waiver of customary conditions.

The Just Energy board's strategic initiatives committee tapped National Bank Financial Inc. as financial advisor and Osler LLP as legal advisor. Legal counsels were Fasken Martineau DuMoulin LLP for Just Energy and Bennett Jones LLP for Filter Group.