Eversource Energy (NYSE:ES) has announced the sale of Aquarion Water Company to the Aquarion Water Authority (AWA) for approximately $2.4 billion. This sale includes $1.6 billion in cash and $800 million of net debt that will be extinguished at closing. The aggregate value of the sale represents 1.7x rate base at December 2024. As a result of the transaction, Eversource expects to record a loss of approximately $300 million in the fourth quarter of 2024, including an estimated income tax expense of about $140 million.
Under Eversource's ownership, Aquarion has grown and diversified its business, adding approximately 30,000 customers through six acquisitions, growing the rate base by a combined aggregate of approximately $200 million. This growth includes Aquarion's entry into the wastewater business with the purchase of the town of New Hartford's municipal water and wastewater treatment systems in 2023 and the purchase of the city of Ansonia's municipal wastewater system in 2024.
The transaction is subject to regulatory approval by the Connecticut Public Utilities Regulatory Authority, the Massachusetts Department of Public Utilities, and the New Hampshire Public Utilities Commission, as well as other customary closing conditions, and is expected to close in late 2025.
Eversource reaffirms its long-term EPS growth target of between 5% and 7% through 2028. The company aims to use the proceeds from the sale to pay down parent company debt while reinvesting capital into its core electric and natural gas businesses, enabling additional investments in reliability for customers and strengthening Eversource's financial position.
Citi and Morgan Stanley & Co. LLC served as financial advisors to Eversource Energy, while Ropes & Gray LLP served as legal counsel. Barclays served as M&A advisor to AWA, with Cravath, Swaine & Moore LLP serving as legal counsel.
Eversource Energy, celebrated as a national leader for its corporate citizenship, transmits and delivers electricity and natural gas and supplies water to approximately 4.4 million customers in Connecticut, Massachusetts, and New Hampshire. The company is recognized for its commitment to building a clean energy future in the northeast, with nationally recognized energy efficiency solutions and successful programs to integrate new clean energy resources like a first-in-the-nation networked geothermal pilot project, solar, offshore wind, electric vehicles, and battery storage into the electric system. The market has reacted to these announcements by moving the company's shares -0.7% to a price of $57.83. For the full picture, make sure to review Eversource Energy's 8-K report.
