American Water acquisition doubles its N.Y. customer base
Voorhees-based American Water Works Co. Inc. on Tuesday acquired seven regulated water systems in New York, doubling its customer base in the state.
Under the agreement with Aqua America Inc., American Water purchased the systems — which serve approximately 152,000 people in Nassau, Washington, Westchester and Ulster counties — for $39 million in cash and $23 million in assumed debt, and sold its Ohio operations for $101 million in cash and $11 million in assumed debt. From both transactions, American Water will receive approximately $60 million in cash and establish Long Island American Water as the largest investor-owned water utility in New York.
"Adding these systems to our existing New York operations helps us to create value for our customers and provides an important opportunity for growth in areas north of New York City," said Jeff Sterba, president and CEO of American Water, in a statement.
A spokeswoman for American Water added in an e-mail that the company's growth in New York allows it to "take advantage of critical mass and provide additional opportunities to continue to provide local customer service."
About 40 Aqua employees in New York will become American Water employees, and 77 American Water employees in Ohio will become Aqua employees. According to Maureen Duffy, vice president of corporate communications and external affairs for American Water, the water systems in New York are fully operational, complete with a call center, information technology and job training.
The agreement for the transactions was first announced July 11, 2011, but the completions were contingent upon customary closing conditions, including regulatory approval by public utility commissions in New York and Ohio, Duffy said.