CLINTON, Conn., Dec. 6, 2000 (BUSINESS WIRE)—Connecticut Water Service, Inc., a holding company that owns several regulated water utilities and an unregulated service company, has reached agreement to acquire Barnstable Holding Company.
Barnstable owns Barnstable Water Company, serving over 7,200 water customers, or a population of approximately 40,000 in Barnstable, Massachusetts, and BARLACO, Inc. a separate real estate company owning over 100 acres of residential and commercial land in Hyannis and Barnstable, Massachusetts.
The value of the transaction is approximately $6.5 million and will result in an exchange of Barnstable stock for Connecticut Water Service, Inc. stock (NASDAQ:CTWS).
The acquisition is expected to become accretive to Connecticut Water Service's earnings within 12 months after closing due to operating and maintenance expense savings and expansion of CTWS's successful unregulated business activities in Massachusetts.
In announcing the agreement Marshall T. Chiaraluce, CEO of Connecticut Water Service, Inc. said, "We are delighted that Barnstable has chosen to become part of Connecticut Water. The acquisition will expand our regulated and unregulated business base beyond Connecticut. The Barnstable operation will allow us to expand the contract services business of our unregulated subsidiary, Connecticut Water Utility Services, Inc., to water utilities and municipal water districts throughout Massachusetts."
In 1999, Connecticut Water Utility Services, Inc. had revenues of approximately $1 million. These revenues were primarily generated through operating contracts for a wide range of services provided to other public and private water utilities in Connecticut. Chiaraluce added, "This is our largest single acquisition to date and will add over 10% growth to our existing customer base."
CTWS presently serves approximately 70,000 water customers or an estimated population of 250,000 people.
George Wadsworth, CEO of Barnstable Water Company stated that "Connecticut Water has a reputation as one of the finest run water utilities in the nation. They have done an outstanding job for their customers and shareholders. We will be very pleased to be part of their organization and their base for growth in Massachusetts."
The acquisition is subject to approvals by Barnstable stockholders and is expected to be completed in the first quarter of 2001. Under Connecticut Water ownership, Barnstable Water Company will operate as a separate water company based in Barnstable and will retain its current office and staff.
Barnstable had net income of $290,000 on gross revenues of $2.6 million for the calendar year 1999. Connecticut Water Service net income was $7.5 million on gross revenues of $42.6 million for the same period.
Since 1998, including the agreement to purchase Barnstable, Connecticut Water Service has grown its customer base more than 17 percent through the acquisition of other water utilities. The other acquisitions that have significantly contributed to Connecticut Water's growth include:
— Crystal Water Company based in Danielson, Connecticut, acquired in
1999 with 3,500 customers serving an estimated population of more
than 10,000 people.
— Gallup Water Service based in Plainfield, Connecticut, acquired in
1998 with 1,100 customers serving an estimated population of more
than 3,200 people.
