Algonquin Power & Utilities Corp. has announced that Liberty Utilities Co., Algonquin’s regulated utility operating subsidiary, has entered into a stock purchase agreement with American Water Works Company, Inc. to purchase American Water’s regulated operations in the State of New York for $608 million (U.S.), subject to customary adjustments.
Headquartered in Merrick, N.Y., New York American Water is a regulated water and wastewater utility serving more than 125,000 customer connections across seven counties in southeastern New York. Operations include approximately 1,270 miles of water mains and distribution lines with 98 percent of customers in Nassau County on Long Island.
“We are thrilled to expand our customer base in the great state of New York,” said Ian Robertson, chief executive officer of Algonquin. “New York State has demonstrated a commitment to ensuring regulated utilities put their customers first. We believe the state’s vision aligns with our customer-driven focus.
“We have experience in multiple states as a water utility operator and are known for our commitment to excellence,” Robertson continued. “We are committed to partnering with our regulator and other state officials to support the affordability of water services, including reducing the burden of local taxes on New York American Water’s customers, which can account for more than half of their monthly bills. We are also excited to welcome New York American Water’s employees to our Liberty Utilities team.”
Liberty Utilities will work closely with American Water, New York American Water and the New York Public Service Commission to ensure a smooth transition. Under Liberty Utilities’ local and responsive operating model, existing local management and operations teams will be maintained and empowered to continue to deliver the safe and reliable service that customers expect, with a commitment by Liberty Utilities to maintain at least existing employment terms for two years following the closing. Customers should not expect any impact on rates as a result of the acquisition. Liberty Utilities is committed to continuing to invest in the water system to improve water quality, customer education on conservation and community outreach.
“This was a very difficult decision for American Water, as we have had the privilege of serving customers and communities in New York for more than 130 years,” said Susan Story, president and CEO of American Water. “After careful and comprehensive analysis, we believe it is in the best interest of our customers in New York to sell to Liberty Utilities, which already has utility operations in the state of New York and will have a larger presence once the transaction closes. We are committed to working together to ensure that the transition is unnoticeable to our customers and that safe and reliable water service continues throughout the transition and beyond.”
Investment Grade Financing Plan and Transaction Details
The financing for the transaction will be consistent with Algonquin’s current investment grade credit profile. Closing of the transaction is subject to the satisfaction or waiver of various customary conditions including regulatory approval by the New York Public Service Commission and review and clearance under U.S. antitrust laws.
For more transaction details, see the fact sheet located at http://investors.algonquinpower.com/MNA and filed with securities regulatory authorities at www.sedar.com and www.sec.gov. The fact sheet is incorporated by reference herein.
Algonquin’s management team will provide further insights on the transaction at its upcoming Analyst & Investor Days in Toronto on December 3, 2019 and New York on December 6, 2019.
CIBC Capital Markets acted as Financial Advisor to Liberty/Algonquin and Husch Blackwell LLP served as transaction legal counsel to Liberty/Algonquin.
About Algonquin Power & Utilities Corp.
Algonquin is a diversified international generation, transmission and distribution utility with approximately U.S. $11 billion of total assets. Through its two business groups, Algonquin is committed to providing safe, reliable and cost effective rate-regulated natural gas, water and electricity generation, transmission and distribution utility services to over 800,000 connections in the United States and Canada, and is a global leader in renewable energy through its portfolio of long-term contracted wind, solar and hydroelectric generating facilities representing over 2,500 megawatts of net installed capacity and more than 1,400 megawatts of additional renewable energy capacity under construction. Visit Algonquin at algonquinpowerandutilities.com and follow us on Twitter @AQN_Utilities.
