American Water has entered into an agreement to sell its regulated New York operations to Liberty Utilities, the regulated utility business of parent company Algonquin Power & Utilities Corp.
"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 a 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 water utility operations and will have a larger presence in New York 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.
“We are also pleased that our agreement with Liberty Utilities ensures that no jobs will be lost as a result of the transaction, with a commitment by Liberty Utilities to maintain existing employment terms for two years following the closing including keeping salaries and benefits comparable for our incredibly talented and hard-working New York American Water employees.”
With over 800,000 customer connections in 14 states, Liberty Utilities is known for its commitment to customer service, the community and conservation. Liberty Utilities upholds the highest standards of service to meet the day-to-day needs of its customers and offers employee programs that recognize superior customer support and contribution to the community.
“We are excited to expand our customer base in the great state of New York, and to bring our experience in multiple states as a water utility operator committed to excellence,” said Ian Robertson, Chief Executive Officer of Algonquin. “We also look forward to welcoming New York American Water’s employees to our Liberty Utilities team.”
Liberty will work closely with New York American Water and the New York Public Service Commission to ensure a smooth transition. Under Liberty Utilities’ commitment to a local, responsive and caring operating model, local management and operations teams will be maintained and empowered to continue to deliver safe and reliable service that customers expect. No jobs will be lost as a result of the transaction, with a commitment by Liberty Utilities to maintain existing employment terms for two years following the closing including keeping salaries and benefits comparable for New York American Water employees.
Customers should also not expect any impact on water rates as a result of the acquisition. Liberty Utilities is also committed to continuing to invest in the water system to improve water quality, customer education on conservation and community outreach. They will also work with regulatory and other state officials as well as with New York American Water during the transition to address the burden of local taxes on New York American Water’s customers, which can account for more than half of their monthly bills.
American Water and Liberty Utilities anticipate the sale will close in the latter half of 2020. The parties have agreed to a sale price of approximately $608 million in cash, subject to customary adjustments. The completion of the transaction is subject to the satisfaction or waiver of various conditions including regulatory approval by the New York Public Service Commission and the receipt of other various customary closing consents and approvals.
Wells Fargo Securities, LLC is serving as exclusive financial advisor and Holland & Knight LLP is serving as legal advisor to American Water.