PITTSBURGH, Nov. 26, 2002 -- DQE announced that the closing of the sale of the majority of AquaSource Inc.'s contract operations business to Southwest Water Co. occurred on November 22, 2002.
The sale to Southwest Water initially was announced on September 17. Since then, the two companies have been working collaboratively to ensure a smooth transition of operations.
The portions of the business acquired by Southwest Water include water and wastewater contract operations primarily in and around Houston, Texas, and the Colorado region. These contract operations provide operating, maintenance and management services to state, county, municipal and industrial water and wastewater systems.
Southwest Water paid AquaSource a purchase price of approximately $11 million in cash, in addition to assuming debt remaining in the acquired business. The contract operations included in this transaction contributed approximately 18 percent of AquaSource's total annual revenues in 2001.
Southwest Water has offered employment to all AquaSource personnel identified as supporting the purchased contract operations. More than 230 individuals have been transferred into the Southwest Water organization as of the November 22 closing.
As previously announced, approximately 85 percent of AquaSource's assets currently are under a sales agreement with Philadelphia Suburban Corporation and AquaSource has agreed to sell its interest in Kaanapali Water Corporation to California Water Service Group. The remaining assets are primarily related to the construction business. DQE is evaluating proposals for some or all of AquaSource's remaining operations, and announcements will occur when definitive agreements are completed. Lehman Brothers is acting as an advisor to DQE and AquaSource.
The sale of AquaSource assets is part of DQE's Back-to-Basics business strategy, which features a more concentrated focus on the company's electric utility operations and its complementary businesses. DQE expects to use the proceeds to enhance its financial flexibility in order to continue the implementation of its Back-to-Basics plan.
AquaSource, a water and wastewater utility services company, is a subsidiary of DQE. Headquartered in Pittsburgh, DQE delivers essential products and related services. Its principal subsidiary, Duquesne Light Company, is a leader in the transmission and distribution of electric energy, offering technological innovation and superior customer service and reliability to more than a half million direct customers throughout southwestern Pennsylvania.
Southwest Water Company provides a broad range of services, including water production and distribution, wastewater collection and treatment, and utility submetering. The company owns regulated public utilities and also serves cities, utility districts and private companies under contract.
