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Electric utilities

Pennsylvania Enterprises, Inc. Shareholders Approve Sale of Water Operations

Strategic Insights

— 1 min read

Shareholders of Pennsylvania Enterprises, Inc. and its principal subsidiary, Pennsylvania Gas and Water Company, have approved the sale of PG&W's water operations to Pennsylvania-American Water Company, a wholly owned subsidiary of American Water Works Company, Inc. This approval marks a significant step towards finalizing the transaction, which was announced earlier this year. The sale involves the transfer of 10 water treatment plants, 36 reservoirs, and approximately 8,000 acres of watershed land to American Water Works Company, valued at approximately $409 million.

Key Takeaways:

  • The sale of PG&W's water operations will result in an estimated loss of $5.8 million, net of the expected income from the water operations through the estimated closing of the sale.
  • The sale price of $409 million reflects a premium over the book value of the water assets.
  • Pennsylvania Enterprises, Inc. and its subsidiary Pennsylvania Gas and Water Company will use the proceeds from the sale to repurchase stock, retire debt, and for working capital for strategic expansion.
  • The company serves approximately 140,000 natural gas customers and 133,000 water customers in an eleven county area of northeastern Pennsylvania.
  • American Water Works Company is the largest investor-owned water utility business in the United States, serving a population in excess of 6 million people in more than 700 communities in 21 states.
  • The sale is subject to approval from certain debtholders of PG&W, termination of the waiting period under Federal antitrust laws, receipt of Pennsylvania Public Utility Commission and other regulatory approvals, and certain other conditions.

Statistics:

  • Sale price: approximately $409 million
  • Estimated loss: $5.8 million
  • Number of water treatment plants: 10
  • Number of reservoirs: 36
  • Acres of watershed land: approximately 8,000
  • Customers served natural gas: approximately 140,000
  • Customers served water: approximately 133,000
  • Population served by American Water Works Company: over 6 million people
  • Number of communities served by American Water Works Company: over 700

Sources:

  • Pennsylvania Enterprises, Inc.
  • Pennsylvania Gas and Water Company
  • Pennsylvania-American Water Company
  • American Water Works Company
  • PRNewswire (Oct. 11, 1995)

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