Oct. 4, 2002 -- The state of Florida's largest investor-owned water and wastewater utility recently entered into a contract to sell all of its utility assets to the Florida Water Services Authority.
The Florida Water Services Authority is a governmental entity that was established by an agreement between the Florida panhandle cities of Gulf Breeze and Milton. The total consideration for the transaction is estimated at $513 million, with $433 million to be paid at closing, with the remainder paid over a three year period.
The acquisition by the Florida Water Services Authority culminates a more than 12 month process in which Florida Water Services Corporation entertained proposals from numerous private and public entities. The transaction would represent the largest utility acquisition in the State of Florida, ahead of the recent acquisitions by JEA of the United Water utility assets and the FGUA acquisition of the Avatar Holdings utility assets, each of which were sold in the $200 plus million range.
The Florida Water Services utility assets comprise more than 150 utility systems in 26 counties across Florida. The utility serves over 500,000 residents and employs approximately 490 employees state wide. Florida Water Services Authority will retain all of the utility's employees as direct employees of the Authority.
The authority intends to keep the statewide network of utility systems intact, providing economies of scale in operations, customer service, administration and emergency preparedness and response.
Multiple layers of customer protections have been built into the transaction structure. Over $44 million for capital projects above the company's normal 5 year capital budget will be included in the estimated $545 million bond financing of the acquisition.
Gross and net revenue guarantees from Florida Water Services should provide stable customer rates for at least three years, except for indexing adjustments related to cost of living increases.
As additional protection of existing customers, $74 million of the transaction consideration is contingent on future customer growth. The transaction is scheduled to close in December, 2002.
Submitted by: Phil Gildan, Greenberg Traurig. For additional information, call (561) 650-7967, e-mail [email protected] or visit the firm's Web site at www.gtlaw.com.
