Allete announced that it has closed the sale of US Water Services to Kurita Water Industries, an international water-management company headquartered in Tokyo, Japan, for $270m.
Allete is an energy company headquartered in Duluth, Minnesota, that owns electric utilities like Minnesota Power, Superior Water, Light and Power of Wisconsin, along with Allete Clean Energy, BNI Energy, and equity interests in the American Transmission.
The acquisition of US Water Services is expected to support the Allete’s long-term diversification strategy that includes expanding investments in clean-energy opportunities with an average annual earnings growth objective of 5% to 7%.
Allete chief financial officer Bob Adams said: “Proceeds from the sale will be primarily reinvested in growth initiatives at Allete Clean Energy and our Regulated Operations, reducing the need for equity issuances.
“This sale will support U.S. Water Services’ expansion and growth while enabling Allete to allocate capital to growth initiatives within Allete and Allete Clean Energy, which has become Allete second-largest net income contributor.”
In its four year ownership and continued investment, Allete has significantly developed US Water Services as an industrial water-service provider in North America through an aggressive expansion in geography, end markets and service offerings.
Allete said that its investments in the clean-energy included the acquisition of three water services companies over the past 36 months.
In February 2019, the company has made the announcement for the sale of US Water Services to Kurita and has closed the deal, following receipt of the necessary regulatory approvals.
In 2015, Allete has acquired the US Water Services, as part of its strategy to invest in energy infrastructure and associated services. The company had initially agreed to acquire 87% stake of US Water Services for $168m and later buy the remaining 13% interest for a contingent amount based on the business’ future earnings.
US Water Services is an integrated water-solutions company based in St. Michael, Minnesota, and serves a diverse mix of approximately 5,000 customers to optimize system performance, reduce water and energy use, and improve efficiency.