Connecticut Water Service Inc. (CTWS) announced that it has entered into an agreement to acquire the Biddeford and Saco Water Co. located in the state of Maine. This transaction will add approximately $19.4 million in rate base and grow CTWS's overall customer base by 15,500 customers, or approximately 15%.
This transaction will make CTWS, through its public water utility subsidiaries, the largest investor-owned water utility in the state of Maine with more than 30,000 customers, expand its presence in New England and provide a solid platform for future growth in the northeast region. CTWS currently has $548.0 million in total assets and serves 106,000 customers, or nearly 350,000 people, throughout Connecticut and Maine. The acquisition requires the approval of the Maine Public Utilities Commission (MPUC), a vote of the shareholders of Biddeford and Saco Water Co., and the satisfaction of several other conditions. CTWS anticipates a closing in the fourth quarter of 2012.
"The agreement to acquire the Biddeford and Saco Water Co. marks the second major acquisition Connecticut Water has announced in less than a year," stated Connecticut Water President and CEO Eric W. Thornburg. "Combined with the January 2012 acquisition of The Maine Water Co., formerly known as Aqua Maine, Inc., the pending acquisition of Biddeford and Saco Water Co. will transform us into
the fastest growing investor-owned utility company across New England and provide us with a secure platform to further expand throughout the region and along the east coast."
Maine Water serves 16,000 customers, or about 48,000 people, in 17 communities throughout the state. The Biddeford and Saco Water Co. complements that acquisition with an additional 15,500 customers in the southern Maine communities of Biddeford, Saco, Old Orchard Beach and Scarborough.
Thornburg noted, "Under CTWS ownership, Biddeford and Saco Water Co. will continue to build on its proud heritage and strong reputation for customer service, water quality and commitment to communities and the environment. The existing staff, office and facilities of the company will be retained."
He further explained, "CTWS will provide Biddeford and Saco Water Co. with access to capital to make important investments in its water system and infrastructure to maintain water quality and enhance reliability of service." The long-term vision is to leverage the economies of scale in Maine and seek opportunities over time to share
staff, resources, systems and services between Maine Water and Biddeford and Saco Water Co. to provide the best, most cost effective service for customers.
Under the agreement, the acquisition will be executed through a stock-for-stock merger transaction valued at approximately $11.4 million. Holders of Biddeford and Saco Water Co. common stock will receive shares of CTWS common stock in a tax-free exchange. In addition, including the assumption by Connecticut Water of
approximately $8.4 million in debt of Biddeford and Saco Water Co., the transaction reflects a total enterprise value of approximately $19.8 million.
Source: Connecticut Water Service