Aqua America ends year with N.Y. acquisition, expands customer base by over 7% in 2006
Aqua America subsidiary has acquired New York Water Service Corp. from Utilities & Industries Corp. for $51 million. The transaction includes a cash payment of $27.4 million and assumption of $23.5 million of debt. The newly acquired water system serves approximately 135,000 residents in Nassau County, Long Island. Including the Aqua New York Inc. purchase, Aqua America recorded 28 acquisitions of water and wastewater systems and septage hauling/wastewater services companies in 2006...
• $51 million accretive transaction brings company's 2006 total to 28 acquisitions.
BRYN MAWR, PA, Jan. 2, 2007 -- Aqua America Inc. announced today that its subsidiary, Aqua New York, Inc., has acquired New York Water Service Corp. from Utilities & Industries Corp., LLC in a transaction valued at approximately $51 million. The transaction included a cash payment of $27.4 million, subject to certain post-closing adjustments, and the assumption of $23.5 million of debt. The newly acquired water system serves approximately 135,000 residents in Nassau County, Long Island.
Including the closing of New York Water Service, Aqua America recorded a total of 28 acquisitions of water and wastewater systems and septage hauling/wastewater services companies in 2006. The transactions expanded the company's existing operations in North Carolina, Virginia, Texas, New York, Pennsylvania, New Jersey, Indiana and Illinois. Since 1995, the company has completed approximately 200 acquisitions. The U.S. water industry is very fragmented, with more than 50,000 water systems operating in the country.
With the New York Water Service acquisition, Aqua America's overall customer base expanded by more than 7 percent in 2006 through acquisitions and organic growth. This increase exceeds the company's goal of 4 percent growth, which is double the utility industry's growth average. In addition, the company continues to engage in various growth ventures to expand its service territory -- usually at the request of real estate developers -- to provide water and/or wastewater utility services to brand new developments. In 2006, the company closed nearly 80 new developer systems, which are projected to eventually serve more than 10,000 residents.
"The closing of New York Water Service puts an exclamation point on another solid year for our company's growth-through-acquisition strategy," said Aqua America Chairman Nicholas DeBenedictis. "Along with our many tuck-in acquisitions and the continued expansion of our non-regulated wastewater services business, we are pleased to cap off 2006 with an immediately accretive, platform-building acquisition that establishes an important beachhead in the country's third most-populous state. From this base, we look forward to pursuing additional growth opportunities across New York in the years to come."
The New York Public Service Commission unanimously approved the New York Water Service acquisition last month. The system provides public water in the well-established southeastern Nassau County communities of Merrick, North Merrick, Bellmore, North Bellmore, Wantagh, Seaford, and portions of Levittown and Massapequa. As a result of the acquisition, New York becomes aqua America's seventh-largest state operation.
"With its long history in the water business, New York Water Service will remain the same fine company it has always been -- only now under the ownership and management of a larger, more experienced company with additional environmental and technical expertise," DeBenedictis said. "What's more, we are pleased that the New York Water Service managers and staff will remain with the Aqua team and will continue to serve customers as they have in the past." New York Water Service will adopt the Aqua New York name in the near future.
DeBenedictis added, "This acquisition makes us a major investor in Long Island, as we plan to spend approximately $14.4 million in infrastructure and water quality system improvements through 2010. We will invest $3.6 million to complete the current installation of radio frequency meter reading technology, which will allow us to read the customers' water meters remotely without having to access their property." The company also plans to rehabilitate two major water supply wells to improve water quality and will construct a third well for needed water supply.
Aqua America Inc. is the largest U.S.-based publicly traded water and wastewater utility holding company, serving approximately 2.8 million residents in Pennsylvania, New York, Ohio, North Carolina, Illinois, Texas, Florida, New Jersey, Indiana, Virginia, Maine, Missouri, and South Carolina. Aqua America is listed on both the New York and Philadelphia Stock Exchanges under the ticker symbol WTR.
-- "Aqua America keeps growing with five new acquisitions in N.J., N.C."
-- "Aqua America acquires three new systems in Leigh County, Pa."
-- "Aqua America chief calls for national infrastructure investment"