American Water to sell Arizona, New Mexico operations to EPCOR
VOORHEES, NJ, Jan. 24, 2011 -- American Water has entered into an agreement with EPCOR Water to sell 100 percent of the stock of its companies that provide regulated water and wastewater services located in Arizona and New Mexico...
VOORHEES, NJ, Jan. 24, 2011 -- American Water Works Company Inc. (NYSE: AWK), the largest investor-owned U.S. water and wastewater utility company, today announced that it has entered into an agreement with EPCOR Water (USA) Inc. ("EPCOR USA") to sell 100 percent of the stock of its companies that provide regulated water and wastewater services located in Arizona and New Mexico, for an estimated sale price of $470 million, subject to certain adjustments. American Water's total investment in both subsidiaries was approximately $450 million as of December 31, 2010.
American Water said it plans to use the proceeds from the sale to reduce both equity and debt financing. The completion of the transaction is subject to customary closing conditions including regulatory approval by public utility commissions in both Arizona and New Mexico.
"This transaction allows us to direct our focus to those operations where we can best serve customers and meet business objectives," said Jeff Sterba, president and CEO of American Water. "Additionally, with this transaction we do not anticipate the need for an equity offering in 2011."
American Water serves approximately 174,000 customers in Arizona and New Mexico. Both American Water and EPCOR are committed to working together to ensure that the transition is a smooth one for customers and that reliable service will continue throughout the transition. Both companies also place significant value in the over 220 employees who work in New Mexico and Arizona and pledge to make this change as seamless as possible. EPCOR USA anticipates that employees will continue to operate these systems within the EPCOR family, once the transaction closes.
EPCOR USA is in the business of building, owning and operating water and wastewater treatment facilities in the southwestern United States. In 2010, EPCOR USA entered into an agreement with American States Water to purchase and operate the Chaparral City Water Company, which serves 13,000 customers in the town of Fountain Hills, Arizona.
EPCOR USA is a wholly owned subsidiary of EPCOR Utilities Inc. ("EUI"). EUI builds, owns and operates water and wastewater treatment facilities, and electric transmission and distribution networks. It provides water and wastewater services to more than one million people in over 70 communities in Western Canada.
Founded in 1886, American Water is the largest investor-owned U.S. water and wastewater utility company. With headquarters in Voorhees, N.J., the company employs more than 7, 000 dedicated professionals who provide drinking water, wastewater and other related services to approximately 15 million people in more than 30 states and parts of Canada.