American Water and Aqua America Agree to Acquisitions in Texas and Missouri
Companies plan to trade water systems
American Water Works Co. Inc., the largest investor-owned U.S. water and wastewater utility company, announced that its subsidiary, Missouri American Water, entered into an agreement with Aqua America Inc. to purchase its regulated 11 water systems and 59 wastewater systems in Missouri for approximately $3 million. The transaction, which requires approval by the Missouri Public Service Commission, expands Missouri American Water’s presence in Missouri by approximately 10,000 people and will conclude Aqua America’s operations in that state.
American Water also announced that it has entered into a separate agreement with Aqua America to sell its regulated 51 water and five wastewater systems in Texas to Aqua for approximately $6 million. Texas American Water serves approximately 16,000 people in the greater Houston metropolitan area. The acquisition requires approval by the Texas Commission on Environmental Quality.
Both companies commended the agreement as a way to strengthen operations in their respective states, creating better economies of scale and providing additional opportunities for both companies to continue providing excellent, local customer service.
“By adding smaller systems into more robust, existing operations, we are able to leverage the expertise and strength of large-scale operations, benefiting customers in Texas and Missouri,” said Jeff Sterba, president and CEO of American Water. “This type of transaction is also a good example of what can be achieved through the optimization of American Water’s business portfolio resulting in value for our customers and many other stakeholders.”
The acquisition will bring an additional 1,600 water customers and 2,100 wastewater customers in Cole, Callaway, Pettis, Benton, Christian, Taney, Stone, Barry and Morgan counties. Missouri American Water’s Jefferson City, Warrensburg and Joplin service districts will manage operations for its new customers.
“We look forward to the opportunity of providing quality water and wastewater service to new customers in Missouri,” said Frank Kartmann, president of Missouri American Water, the largest investor-owned water utility in Missouri, currently serving approximately 1.5 million people in more than 100 communities throughout the state.
American Water and Aqua America expect both acquisitions to close in the second half of 2011.