Aqua America, Inc., was awarded $12.3 million plus interest in an arbitration over the final purchase price for the stock of the AquaSource operations. Aqua purchased these operations from Duquesne Light Holdings, Inc. on July 31, 2003.
The approximate $12.3 million adjustment means Aqua paid the minimum purchase price of $178.4 million (which includes working capital and tax adjustments) for more than 130,000 customer accounts, or approximately $1,300 per customer, which is one of the lowest costs paid in a major water company acquisition to date. Chairman and President Nicholas DeBenedictis said, "The AquaSource acquisition was accretive to earnings from day one and this arbitration award will serve to enhance the accretion to earnings."
The award represents a cash refund to Aqua for a portion of the estimated purchase price originally paid in accordance with the purchase agreement. The purchase agreement required adjustments to be made to the final purchase price based upon the achievement of specific operating performance metrics, involving revenue, rate base and customer connections between the time of the signing of the purchase agreement and the closing on the transaction.
"We are very pleased with the arbitrator's decision and intend to reinvest the $12.3 million in capital improvements in the acquired systems," said DeBenedictis. "Since taking ownership, we have been making needed improvements to bring the AquaSource systems to required water quality standards, as well as instituting changes to professionally manage the operations. In addition, we continue to identify synergies from the acquisition, and are filing for needed rate relief to recover our investments and fully earn on our assets," added DeBenedictis.