Florida Water Services Sells Deltona System for $59.5 Million
ALLETE, Inc. announced that its subsidiary, Florida Water Services Corp., agreed to sell its water and wastewater system serving Deltona, Fla., to the city of Deltona for $59.5 million. Florida Water Services will realize an after-tax gain of approximately $20 million and expects to close on the sale by the end of the year, pending satisfaction of certain contingencies and regulatory approvals in Florida.
"Deltona is one of Florida Water's larger systems," said Dave Gartzke, ALLETE chairman, president and CEO. "We're pleased that we were able to reach an acceptable agreement with the city of Deltona as we continue to work to exit our water businesses."
Deltona joins seven other Florida communities who have announced plans to purchase water systems that combined represent about 70 percent of Florida Water's assets. The total amount of the sale of the eight systems including Deltona is $356 million and represents an after-tax gain to Florida Water of about $75 million. The cash proceeds after transaction costs, retirement of Florida Water debt, and payment of income taxes are approximately $185 million, and will be used to retire debt at ALLETE.
Florida Water Services continues to work with local governments interested in purchasing remaining water systems. If interested governmental entities cannot be found, the remaining systems will be sold to a private buyer.