BOSTON, Mass. and HARTFORD, Conn. – Eversource Energy today announced that it has entered into a definitive agreement to sell Aquarion Water Company to the Aquarion Water Authority, a quasi-public corporation and political subdivision of the State of Connecticut and a standalone, newly created water authority alongside the South Central Connecticut Regional Water Authority.
Subject to certain closing adjustments, the aggregate enterprise value of the sale is approximately $2.4 billion, which includes approximately $1.6 billion in cash and $800 million of net debt that will be extinguished at closing. The aggregate value represents 1.7X rate base at December 2024.
The proceeds from the sale will enable Eversource to pay down parent company debt while efficiently reinvesting capital into its core electric and natural gas businesses, enabling additional investments in reliability for customers and strengthening Eversource’s financial position. As a result of this transaction, Eversource expects to record a loss on the planned sale of Aquarion of approximately $300 million in its results for the fourth quarter of 2024. This loss on sale includes approximately $140 million of estimated income tax expense. Eversource reaffirms its long-term EPS growth target of between 5% and 7% through 2028.
“Since our acquisition of Aquarion in 2017, we have built on Aquarion’s longstanding track record of superior customer service, industry-leading reliability and operational success to help them become the largest investor-owned water utility in New England and seventh largest in the country,” said Eversource Chairman, President and CEO Joe Nolan. “I would like to thank the Aquarion leadership team for its sound management and financial stewardship of the company and extend my sincere gratitude to all Aquarion employees for their tireless, customer-first focus on safety and exceptional service, consistent with our core values at Eversource. By prioritizing prudent investments with a focus on affordability, we’ve worked together to ensure Aquarion’s water service is among the best in New England.”
“This transaction reinforces our commitment to our core electric and natural gas operations as the largest regulated utility in New England, allowing us to optimize our portfolio and strengthening our balance sheet while reinvesting capital to benefit our customers,” Nolan continued. “We will continue to collaborate with all stakeholders across our service territories in Connecticut, Massachusetts and New Hampshire to deliver cost-effective solutions that ensure safe, reliable electric and natural gas service for our customers.”
“Through the AWA transaction, we are advancing our water utility’s regional supply strategy and are excited to put our organization’s 45-year track record of demonstrating the benefits of RWA’s stewardship, expertise, regulation and organizational stability to work for Aquarion customers, communities and employees as a not-for-profit, quasi-public utility,” said RWA & AWA Interim President and CEO Sunder Lakshminarayanan. “Both the RWA and Aquarion share similar missions to be the service provider and employer of choice. We strive to do this by providing customers with the highest quality water and services at an affordable cost while protecting the environment, and creating a safe and positive workplace where all employees can do their best work on behalf of the customers and communities served.”
Aquarion, headquartered in Bridgeport, Connecticut, serves nearly 250,000 water and wastewater customers in 72 cities and towns across Connecticut, Massachusetts, and New Hampshire – with more than 360 employees that help provide safe and reliable service to more than 775,000 people. Aquarion has been in the water business since 1857 through its predecessor company (Bridgeport Hydraulic Company) and has continued to grow and diversify its business since its acquisition by Eversource in 2017. Under Eversource’s ownership, Aquarion has added approximately 30,000 customers through six acquisitions – including New England Service Company (CT, NH, MA) in 2021, The Torrington Water Company (CT) in 2022 and the Pinehills Water System in Plymouth (MA) in 2023 – that grew the rate base by a combined aggregate of approximately $200 million. This growth also includes Aquarion’s entry into the wastewater business with the purchase of the Town of New Hartford’s (CT) municipal water and wastewater treatment systems in 2023 and the purchase of the City of Ansonia’s (CT) 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 approvals pursuant to the Hart-Scott-Rodino Antitrust Improvements Act as well as other customary closing conditions. The transaction is expected to close in late 2025.
Citi and Morgan Stanley & Co. LLC served as financial advisors to Eversource Energy. Ropes & Gray LLP served as legal counsel to Eversource Energy.
Barclays served as M&A advisor to AWA. Cravath, Swaine & Moore LLP served as legal counsel to AWA.
