Algonquin Power & Utilities Corp. (APUC) has announced that Liberty Utilities, APUC's regulated utility business, has entered into an agreement with Western Water Holdings, a wholly-owned investment of Carlyle Infrastructure, to acquire the regulated water distribution utility Park Water Company.
Park Water owns and operates three regulated water utilities engaged in the production, treatment, storage, distribution, and sale of water in Southern California and Western Montana, USA. The three utilities collectively serve approximately 74,000 customer connections and have more than 1,000 miles of distribution mains.
Total consideration for the utility purchase is expected to be approximately US$327 million, which includes the assumption of approximately US$77 million of existing long-term utility debt. The acquisition will maintain APUC's strategic business mix and further enhance its investment grade consolidated capital structure. The acquisition is expected to have net property, plant and equipment and other assets for rate making purposes at closing of U.S. $259 million.
Scotiabank acted as financial advisor to APUC as part of the transaction. Wells Fargo served as financial advisor to Carlyle.
Ian Robertson, Chief Executive Officer of APUC, commented:
The acquisition of Park Water strategically expands our utility presence in California and marks our entry into the state of Montana. The acquisition builds on our strong water utility expertise, provides continuing opportunity for organic growth, and increases the proportion of our earnings from long-term, stable utility assets. We look forward to bringing our caring, local and responsive business approach to the communities served by Park Water.
Carlyle Managing Director Robert Dove stated:
We are delighted to have reached a signed agreement with Liberty, an experienced U.S.-regulated utility, to acquire Park Water and its subsidiaries. Liberty Utilities' water utility expertise, commitment to customer service and long term ownership approach will enable Park Water to continue to provide excellent service to its customers.
The acquisition is subject to certain approvals and conditions, including state and federal regulatory approval, and is expected to close in the latter half of 2015.