Aqua America Completes Major Expansion in Texas with Purchase of Water Systems from American Water
June 16 2011 - 9:12AM
Business Wire
Aqua America, Inc. (NYSE: WTR), the largest publicly traded
water utility in the state of Texas, announced today that its Texas
subsidiary has completed the purchase of American Water Works
Company, Inc.’s (NYSE: AWK) regulated Texas operations,
significantly expanding its customer base in one of its fastest
growing and energy-rich states.
Aqua Texas has added 51 water and five wastewater systems, which
serve 4,200 water and 1,100 wastewater customers (approximately
16,000 people) from Texas American for approximately $6 million—the
approximate book value of the assets. The systems, which will be
run as a single unit out of Aqua’s Houston office, serve parts of
Brazoria, Harris, Liberty, Matagorda and Montgomery counties in the
greater Houston metropolitan area. The acquisition follows Aqua’s
December 2010 acquisition of water and wastewater system assets of
Gray Utility, which served approximately 6,300 people in Chambers,
Jefferson and Liberty counties along the Gulf Coast near Baytown,
which is about 40 miles from downtown Houston. Collectively in
2010, Aqua Texas purchased 10 systems and increased its customer
base by approximately six percent, nearly 90 percent of which was
from acquisitions. Since entering the state in 2003, Aqua will have
grown its customer base by 50 percent upon closing the Texas
American transaction.
“These transactions demonstrate the success of our
growth-through-acquisition strategy,” said Aqua America Chairman
and CEO Nicholas DeBenedictis when the deal was announced last
year. “We are proud to be investing while strategically planning
and executing our growth efforts in states like Texas where our
operations already have critical mass, and is one of the
fastest-growing states in the nation. Texas is also one of our
areas of operations that offers opportunities for the water-energy
nexus that could have a positive impact on the future of our
operations.”
Aqua is working to concentrate its customer portfolio in states
that demonstrate a positive regulatory environment. Aqua continues
to pursue a growth-through-acquisition strategy that spreads
weather and regulatory risks and opportunities over a number of
states, while leveraging greater economies of scale and customer
growth.
In addition to customer growth, energy-rich Texas with its
natural gas and energy resources, offers other potential business
opportunities for Aqua America. Speaking before the Citi Climate
Change and Water Conference last week in London, England,
DeBenedictis said that the water-energy nexus will play a larger
role in the future of the company with respect to environmental and
business opportunities.
“We are prepared to take a responsible and active role in what
is becoming the next energy boom in Texas, Pennsylvania and some
other states—natural gas drilling,” said DeBenedictis. “Shale
drilling for natural gas is a very water intensive business that
can provide an economic boost well into the future if it’s done
right environmentally,” said DeBenedictis. “We are currently
focusing on the ‘clean water’ aspects of the drilling business and
will pursue the growth opportunities provided by the shale drilling
industry, which is thought to be at the dawn of its life.”
Aqua America is one of the largest U.S.-based, publicly-traded
water utilities and serves almost 3 million residents in
Pennsylvania, Ohio, Illinois, Texas, New Jersey, Indiana, Virginia,
Florida, North Carolina, Maine, Missouri, New York, and Georgia.
Aqua America is listed on the New York Stock Exchange under the
ticker symbol WTR.
This release contains forward-looking statements within the
meaning of The Private Securities Litigation Reform Act of 1995
that address, among other things, the effect of the acquisition of
the Texas systems on the Company and the benefits of the
acquisition, the Company’s strategy to focus its resources where
there is a positive regulatory environment and the Company has
critical mass, the continuation of the Company’s
growth-through-acquisition strategy and the impact on weather and
regulatory risks, economies of scale and customer growth,
opportunities from the water-energy nexus for the Company and the
potential impact of those opportunities on the Company. There are
important factors that could cause actual results to differ
materially from those expressed or implied by such forward-looking
statements including: regulatory approvals for the transaction; the
risk that the acquired company’s business will not be successfully
integrated; the costs related to the transaction; the inability to
obtain or meet conditions imposed for governmental approvals for
the transaction; the risk that anticipated benefits will not be
obtained or will not be obtained within the time anticipated; and
other key factors that we have indicated could adversely affect our
business and financial performance discussed in our Annual Report
on Form 10-K for the fiscal year ended December 31, 2010, which is
on file with the Securities and Exchange Commission. Aqua America
is not under any obligation (and expressly disclaims any such
obligation) to update or alter its forward-looking statements
whether as a result of new information, future events, or
otherwise.
WTRF
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