Aqua America has signed an agreement to acquire Peoples for an enterprise value of $4.275bn, including the assumption of about $1.3bn of debt.
The acquisition by the Pennsylvania-based water utility company Aqua America includes Peoples Natural Gas Company, Peoples Gas Company and Delta Natural Gas Company. The acquisition will bring together the second largest water utility and the fifth largest stand-alone natural gas local distribution company in the US.
The combined company will serve 1.74 million customer connections, representing nearly 5 million people with a 10-state footprint. In 2019, the new company is expected to have an asset base of $10.8bn in assets and a projected regulated rate base of over $7.2bn.
Aqua America will acquire Peoples from infrastructure funds managed by Sausalito, California-based SteelRiver Infrastructure Partners. It is claimed that the new company will be positioned to grow and generate shareholder value through increased scale, balanced portfolio and stable capital structure.
Aqua chairman and CEO Christopher Franklin said: “The acquisition of Peoples is a great strategic fit and aligns directly with our growth strategy and core competencies of building and rehabilitating infrastructure, timely regulatory recovery, and operational excellence.
“Both Aqua and Peoples place customers at the center of all we do. We care deeply for employees and their safety, have expertise in pipe replacement, and prioritize stewardship of the environment.
“Both companies have worked hard to earn credibility with regulators and respect of other stakeholders, and to employ advanced operational efficiencies, all of which create long-term value for customers, communities, employees and shareholders.”
The acquisition is subject to regulatory approvals from public utility commissions in Pennsylvania, Kentucky and West Virginia. It is expected to be closed in the middle of next year.
After the transaction is closed, the combined businesses will be led by Franklin. The company’s corporate headquarters will be in Bryn Mawr, Pennsylvania and Aqua’s water and wastewater operations will remain headquartered in Bryn Mawr.
Peoples will remain headquartered in Pittsburgh. Other operating locations will remain unchanged.
Aqua America, the 132-year-old regulated water and wastewater utility, serves 3 million people in Pennsylvania, Ohio, North Carolina, Illinois, Texas, New Jersey, Indiana and Virginia.
In July, the company secured approval from the Pennsylvania Public Utility Commission (PUC) to acquire Limerick Township’s wastewater assets.
The Limerick system serves approximately 5,400 wastewater connections in Montgomery County.