PHOENIX, AZ, Jan. 24 /PRNewswire/ - EPCOR Water (USA) Inc. (EPCOR USA), a wholly owned subsidiary of EPCOR Utilities Inc. (EPCOR), has entered into an agreement for the acquisition of 100% of the stock of Arizona American Water and New Mexico American Water, wholly owned subsidiaries of American Water Works Company Inc. for total consideration of US $470 million, subject to certain adjustments. The transaction is subject to regulatory approvals in both states.
Arizona American Water is a regulated utility that provides water service to approximately 106,000 metered water customers and wastewater services to 51,000 customers. These customers live in 13 municipalities, 90% of which are located within a 20 mile radius in the Phoenix area.
New Mexico American Water provides water and wastewater services to the City of Clovis in eastern New Mexico, and in the greater Edgewood area near Albuquerque, serving more than 17,000 customers.
"This investment is consistent with EPCOR's strategy of redeploying funds from the sale of our investment in Capital Power Corporation into quality rate regulated businesses. When complete, the transaction will provide EPCOR USA with a strong hub in the U.S. southwest," said Don Lowry, EPCOR President and CEO. "This acquisition provides a combination of competent and committed people who have a top notch safety record, solid assets, and presence in a market where we have confidence in the long-term growth prospects."
Mr. Lowry added, "We look forward to continuing the high level of service provided by American Water and participating in the lives of the communities where we will be operating. We will work with American Water and state regulators to make a timely and seamless transition."
The US $470 million acquisition includes the assumption of approximately $10 million of long-term debt by EPCOR Water (USA) Inc. and is subject to regulatory approval by the Arizona Corporation Commission and New Mexico Public Regulation Commission, which is anticipated in the first quarter of 2012. The acquisition will be funded with a combination of cash and debt financing. TD Securities is EPCOR USA's financial advisor on this transaction.
Arizona American Water employs approximately 200 people, while New Mexico American Water has 25 staff. Once the transaction closes, it is anticipated they will continue to operate the utilities within the EPCOR family.
EPCOR USA is in the business of building, owning and operating water and wastewater treatment facilities in the southwestern United States. In 2010, EPCOR USA entered into an agreement with American States Water Company to purchase and operate the Chaparral City Water Company, which serves 13,000 customers in the town of Fountain Hills, Arizona.
About EPCOR Utilities Inc.
EPCOR USA is a wholly owned subsidiary of EPCOR. EPCOR builds, owns and operates electrical transmission and distribution networks, water and wastewater treatment facilities and infrastructure. EPCOR, headquartered in Edmonton, Alberta, is an Alberta Top 50 employer.
About American Water Works Company
Founded in 1886, American Water is the largest investor-owned U.S. water and wastewater utility company. With headquarters in Voorhees, N.J., the company employs more than 7,000 dedicated professionals who provide drinking water, wastewater and other related services to approximately 15 million people in more than 30 states and parts of Canada.
Certain information in this news release relating to EPCOR is forward-looking and related to anticipated events and strategies. When used in this context, words such as "will", "anticipate", "believe", "plan", "intend", "target" and "expect" or similar words suggest future outcomes. By their nature, such statements are subject to significant risks and uncertainties, which include, but are not limited to, regulatory and government decisions, economic conditions, and availability and cost of financing.
Readers are cautioned not to place undue reliance on forward-looking statements as actual results could differ materially from the plans, expectations, estimates or intentions expressed in the forward-looking statements. Except as required by law, EPCOR disclaims any intention and assumes no obligation to update any forward-looking statement even if new information becomes available, as a result of future events or for any other reason.
SOURCE EPCOR Utilities Inc.