Aqua America purchases American Water's Ohio operations; sells its New
York operations to American Water
BRYN MAWR, Pa.--(BUSINESS WIRE)--
Aqua America, Inc. (NYSE: WTR) announced today that it has completed the
purchase of all of American Water Works Company, Inc. (NYSE: AWK)
regulated operations in Ohio and simultaneously sold its regulated
operations in New York to American Water. Aqua America is the largest
investor-owned water utility in Ohio.
The purchase, for $101 million in cash plus assumed debt of $11 million,
yielded Aqua America eight additional water systems and one wastewater
system in Ohio, which serve approximately 50,730 water and approximately
6,550 wastewater connections. The systems serve parts of nine counties
primarily in central and northeast Ohio. The acquisition increases Aqua
Ohio's customer base by approximately 66 percent and adds approximately
$95 million in additional rate base. The transaction is expected to
improve operating efficiency at Aqua Ohio as it spreads fixed costs over
57,280 more customers in that state, which should have a positive impact
on future rates for customers.
In a separate agreement, Aqua America sold its seven New York water
systems, which serve approximately 50,520 customers to American Water's
New York subsidiary for approximately $39 million in cash plus assumed
debt of $23 million. The New York systems had approximately $46 million
of rate base. The sale of Aqua America's New York operations will
conclude its operations in that state.
The purchase prices for both the Ohio and New York transactions are
subject to certain post-closing adjustments.
This is the latest of five successful transactions Aqua America has
completed in a one-year period to grow and consolidate its customer base
in fewer states, improving its operating efficiency, while pruning
assets in areas that do not present those opportunities. Since May 2011,
Aqua America has sold its Missouri operations to American Water;
purchased American Water's Texas operations; and sold its Maine
operations to Connecticut Water.
"This transaction is the latest and the largest of several acquisitions
and purchases we have completed to transform the company by maximizing
efficiencies and concentrating our efforts in states where we have
critical mass," said Aqua America Chairman and CEO Nicholas
DeBenedictis. "Additionally, Ohio and Texas are energy-rich states with
growth opportunities for the water-energy nexus that could have a
positive impact on the future of our company."
DeBenedictis said the company is prepared to take a responsible and
active role in what is becoming the next energy boom in Ohio,
Pennsylvania, Texas and some other states—natural gas drilling. "Shale
drilling for natural gas is a very water-intensive business that can
provide an economic boost well into the future if it's done right
environmentally."
The acquisition of American Water's Ohio operations and the sale of its
New York operations are consistent with Aqua America's strategy to
concentrate its customer portfolio in states that demonstrate a positive
regulatory environment, while leveraging greater economies of scale and
customer growth opportunities. Priority is given to states that provide
a regulatory opportunity for capital investment surcharges and
consolidated rates, which help the company to maintain water quality and
reliable service for its customers.
Aqua America is one of the largest U.S.-based, publicly-traded water
utilities and serves almost 3 million residents in Pennsylvania, Ohio,
Illinois, Texas, New Jersey, Indiana, Virginia, Florida, North Carolina,
and Georgia. Aqua America is listed on the New York Stock Exchange under
the ticker symbol WTR.
This release contains forward-looking statements within the meaning of
The Private Securities Litigation Reform Act of 1995 that address, among
other things, the size of the transactions, the effect of the
acquisition of the Ohio operations and other transactions on the Company
and the anticipated benefits of these transactions, the Company's
strategy to focus its growth efforts in certain states, and the
potential efficiencies from focusing on those states and potential
business opportunities in those states. There are important factors that
could cause actual results to differ materially from those expressed or
implied by such forward-looking statements including: the risk that the
acquired company's business will not be successfully integrated; the
costs related to the transaction; the risk that anticipated benefits
will not be obtained or will not be obtained within the time
anticipated; and other key factors that we have indicated could
adversely affect our business and financial performance discussed in our
Annual Report on Form 10-K for the fiscal year ended December 31, 2011,
which is on file with the Securities and Exchange Commission. Neither
Aqua America nor American Water is under any obligation (and each
expressly disclaims any such obligation) to update or alter its
forward-looking statements whether as a result of new information,
future events, or otherwise.
WTRF
Aqua America, Inc.
Donna Alston
Director, Communications
610-645-1095
dpalston@aquaamerica.com
or
Brian
Dingerdissen
Director, Investor Relations
610-645-1191
bjdingerdissen@aquaamerica.com
Source: Aqua America, Inc.
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