Back to top

Image: Bigstock

California Water (CWT) to Acquire Keauhou Community's Assets

Read MoreHide Full Article

California Water Service Group's (CWT - Free Report) unit Hawaii Water Service has inked a deal to acquire Keauhou Community Services, Inc.'s wastewater system assets. Also, the company will provide wastewater utility service to its customers in Keauhou on the island of Hawaii.

The subsidiary has its presence in the Keauhou system since 2018 through an operation and maintenance contract. With this acquisition, 1,500 more customers will be added to its existing base,  expanding its operations further.

Notably, the agreement is subject to the approval of the Hawaii Public Utilities Commission.

Growth Opportunities

California Water Service has been boosting its operations via organic and inorganic prospects. In October, the utility completed the Palos Verdes Peninsula Water Reliability Project, increasing the local residents’ reliability on the drinking water infrastructure on the Palos Verdes Peninsula.

Moreover, the company is also broadening its business scope by making strategic buyouts. In October, its arm New Mexico Water Service entered into an agreement to acquire Animas Valley Land and Water Co., which on conclusion, will win 2,000 customers for California Water Service in northwest New Mexico. Also, in September, Hawaii Water Service secured an approval to purchase Kalaeloa Water Company from Hunt Companies and in June, it bought Rainier View Water Company.

Need for Acquisitions

Growth by acquisition policy is essential in the fragmented water utility space. This is because small water and wastewater service providers find it difficult to make regular investments in maintaining and bettering the aging infrastructure and providing an uninterrupted water supply 24X7.

Thus, consolidation enables the big water suppliers to make crucial investments in infrastructure to provide pure water as well as wastewater services to its new customers at reasonable prices.  Customers are also benefiting from the integrations as they receive high-quality and reliable services.

Peer Moves

California Water Service apart, other water utilities like American Water Works Company (AWK - Free Report) , Global Water Resources, Inc. (GWRS - Free Report) and Essential Utilities (WTRG - Free Report) also are making strategic acquisitions and fortifying their footprint.

Zacks Rank & Price Performance

Currently, the company flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of California Water Service have gained 12.8%, outperforming the   industry’s rise of 10.8% in the past six months.

Just Released: Zacks’ 7 Best Stocks for Today

Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.4% per year.
These 7 were selected because of their superior potential for immediate breakout.

See these time-sensitive tickers now >>

Published in