Aquarion Company (Aquarion), parent of Aquarion Water Company, and The Torrington Water Company (TWC) (OTC Pink Sheets Trading Symbol: TORW) have entered into a definitive agreement whereby Aquarion will acquire all outstanding shares of TWC, and TWC will become a wholly-owned subsidiary of Aquarion. Aquarion is a water distribution company and holding company based in Bridgeport, Connecticut, providing regulated water service to customers in Connecticut, Massachusetts, and New Hampshire. TWC is a water distribution company based in Torrington, Connecticut providing regulated water service to Connecticut customers in Torrington and to portions of Burlington, Harwinton, Litchfield, and New Hartford.
Under the agreement, which was unanimously approved by the Boards of Directors of both Aquarion and TWC, the acquisition will be executed through a stock-for-stock transaction that is structured to be a tax-free reorganization. The agreement provides that the stockholders of TWC will receive common shares of Aquarion's parent, Eversource Energy (Eversource) (NYSE: ES), in exchange for their TWC common stock. The exchange ratio implies a $92.81 per share price based on the $86.66 closing price of Eversource Energy common shares on March 7, 2022. In connection with the exchange, Eversource Energy will issue between 885,000 and 925,000 ES common shares at closing. TWC has assets of approximately $65 million.
The merger will add approximately 10,100 customers to Aquarion's base of 226,000 customers. TWC's service area will complement Aquarion's existing footprint in the northwestern part of the Connecticut. Under the agreement, all TWC employees will be retained.
Over the last ten years, Aquarion has integrated over 84 water systems into its operations
"Both Aquarion and TWC can trace their local water service roots back to the 1800s. This merger will ensure this history lives on and continues to create long-term benefits for customers, employees, and the communities we serve," said Donald Morrissey, President of Aquarion Water Company. "We will make the needed investments in this water system to ensure continued reliability and water quality for decades to come. We also welcome TWC's dedicated employees to the Aquarion team."
Over the last ten years, Aquarion has integrated over 84 water systems into its operations, strengthening the company's ability to deliver high-quality water to communities throughout the region.
"I am pleased with the transaction, as TWC and Aquarion share many common values and strategies, and look forward to working with Aquarion's leadership team on a smooth transition for our customers and employees," said Susan Suhanovsky, President of The Torrington Water Company. She also noted, "Aquarion values TWC's rich history and will continue our tradition of delivering reliable, high-quality water service to our customers."
The completion of the transaction will require approval by the stockholders of TWC, and the TWC Board of Directors has resolved to recommend the adoption of the merger agreement by the stockholders. The transaction is also subject to the approval of the Connecticut Public Utilities Regulatory Authority, and satisfaction of several other customary conditions. The parties plan to file all required regulatory applications over the coming months with an anticipated closing by the end of 2022.
Advisors and Counsel
Ropes & Gray LLP served as counsel to Aquarion Company and Eversource Energy in the transaction. Boenning & Scattergood, Inc. served as financial advisor and rendered a fairness opinion to the Board of Directors of The Torrington Water Company. Pullman & Comley LLC served as counsel to The Torrington Water Company.
