CLINTON, CT, March 11, 2005 (BUSINESS WIRE) -- Connecticut Water Service Inc. has entered into an agreement to sell the assets of its Massachusetts' subsidiary, The Barnstable Water Company, and the assets of its BARLACO real estate subsidiary to the town of Barnstable, Mass. The water utility provides water service to over 7,200 residential, commercial and public authority billing customers in Barnstable and Hyannis. BARLACO holds 109 acres of non-watershed land in the mid-Cape region.
The total value of the transaction is $11 million, with $10 million to be received by The Barnstable Water Company in 2005 for the water utility assets and associated liabilities. It is expected that the transaction will close during the second quarter of 2005. A separate real estate transaction for the BARLACO assets will take place in 2006 and produce an additional $1 million.
Connecticut Water Service will also enter into a contract with the town to provide full operating and management services for the Barnstable water utility operation. Under this full service contract the customers will continue to receive the same full range of field and customer services presently provided by Barnstable Water Company.
In commenting on the transaction, Marshall T. Chiaraluce, company chairman and CEO, said, "The town of Barnstable has been interested in the purchase of these assets ever since Connecticut Water acquired the water utility and real estate company in 2001 as part of its acquisition of The Barnstable Holding Company, a company substantially owned by the Wadsworth family. The water utility has been incorporated since 1911. The Town maintained that it had a legislative right under Barnstable's 1911 charter to purchase the company. Rather than engage in lengthy and costly litigation, both parties agreed to attempt to negotiate a purchase and sale agreement that would meet the interests of both parties. Through this cooperative arrangement we are very pleased to continue to provide the same full range of water utility services to the town and the customers of the water utility as we have under our ownership."
Barnstable Town Manager John C. Klimm said, "We are very pleased to be in a position to potentially own these important water utility and land assets for this generation and for the generations to follow. Water and land are absolutely essential and important commodities on Cape Cod. These valuable assets will now be controlled by the town. We are also very fortunate that we reached agreement for continued management and operating services with Connecticut Water. In the relatively short time they have owned and operated the water system, they have provided outstanding service to the customers and have invested in the utility's infrastructure to maintain it in compliance with all state and federal regulations for drinking water."
The agreement is subject to final approval by the town council, following a public meeting to be held in late March, as well as Connecticut Water Service Board.
Connecticut Water Service Inc. (www.ctwater.com) is the largest, domestic-based, investor-owned water utility in New England. It provides water to over 87,750 customers in 42 towns in Connecticut and Massachusetts, as well as providing water-related services under contract in municipalities and companies.
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