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American Water's (AWK) Illinois Unit Buys Assets for $0.55M
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American Water Works Company (AWK - Free Report) announced that its subsidiary, Illinois American Water, has acquired water and wastewater system assets of Village of Livingston for $0.55 million. Illinois American Water, through this acquisition, will be providing water services to 375 new customers and wastewater services to 352 new customer connections.
The acquisition will pave way for the necessary investments to upgrade of the Village of Livingston water and wastewater system. Illinois American Water has plans to invest $3.3 million in the first five years of its ownership to upgrade the Village of Livingston water and wastewater systems. The upgrades include replacing fire hydrants, outdoor water meters and water mains. A new water tank will also be constructed to serve customers.
Illinois American Water provides water and wastewater services to nearly 1.3 million people. The company continues to expand operations through systematic acquisitions and still has six acquisitions pending in its jurisdiction.
Consolidation Essential for Water Space
Aging of water and wastewater assets along with fragmentation are primary concerns of the existing U.S. water and wastewater industry. Per the U.S. Environmental Protection Agency reports, more than 53,000 community water systems and 16,000 wastewater systems in the United States are providing water solutions to customers.
This highly fragmented industry creates operational challenges in meeting the essential requirement for upgrades and maintenance, as small service providers at times do not have the necessary financial strength to fund costly infrastructural upgrades.
Large water utilities like American Water are quite active in making acquisitions to expand operations and make the necessary investments to upgrade the acquired property. From the start of the year till Aug 1, the company expanded the customer base by 11,200 through organic means and acquisitions. Its pending acquisitions (as of Aug 1), when completed, will add another 86,900 customers to the customer base. The company remains committed to expand the business through inorganic and organic ways.
Likewise, another water utility, Essential Utilities (WTRG - Free Report) has not only expanded water and wastewater operations through acquisitions but also ventured into the natural gas distribution business through the acquisition of Peoples. Essential Utilities completed the acquisition of Common Water on Aug 2, 2021, which added 980 customers. The company plans to invest $3 billion through 2023 to fortify water and natural gas operations as well as efficiently serve the expanding customer base.
Another water utility, Global Water Resources, Inc. (GWRS - Free Report) is taking the inorganic route to expand operations in the United States and making investments to upgrade its infrastructure. California Water Service (CWT - Free Report) has decided to invest in the range of $270-$300 million in 2021 and expand operations through strategic acquisitions. In June, the company inked a deal to acquire the assets of HOH Utilities Company, which in turn will expand the utility’s footprint in the island of Kauai.
Price Performance
Shares of American Water have outperformed the industry in the past 12 months.
Image: Bigstock
American Water's (AWK) Illinois Unit Buys Assets for $0.55M
American Water Works Company (AWK - Free Report) announced that its subsidiary, Illinois American Water, has acquired water and wastewater system assets of Village of Livingston for $0.55 million. Illinois American Water, through this acquisition, will be providing water services to 375 new customers and wastewater services to 352 new customer connections.
The acquisition will pave way for the necessary investments to upgrade of the Village of Livingston water and wastewater system. Illinois American Water has plans to invest $3.3 million in the first five years of its ownership to upgrade the Village of Livingston water and wastewater systems. The upgrades include replacing fire hydrants, outdoor water meters and water mains. A new water tank will also be constructed to serve customers.
Illinois American Water provides water and wastewater services to nearly 1.3 million people. The company continues to expand operations through systematic acquisitions and still has six acquisitions pending in its jurisdiction.
Consolidation Essential for Water Space
Aging of water and wastewater assets along with fragmentation are primary concerns of the existing U.S. water and wastewater industry. Per the U.S. Environmental Protection Agency reports, more than 53,000 community water systems and 16,000 wastewater systems in the United States are providing water solutions to customers.
This highly fragmented industry creates operational challenges in meeting the essential requirement for upgrades and maintenance, as small service providers at times do not have the necessary financial strength to fund costly infrastructural upgrades.
Large water utilities like American Water are quite active in making acquisitions to expand operations and make the necessary investments to upgrade the acquired property. From the start of the year till Aug 1, the company expanded the customer base by 11,200 through organic means and acquisitions. Its pending acquisitions (as of Aug 1), when completed, will add another 86,900 customers to the customer base. The company remains committed to expand the business through inorganic and organic ways.
Likewise, another water utility, Essential Utilities (WTRG - Free Report) has not only expanded water and wastewater operations through acquisitions but also ventured into the natural gas distribution business through the acquisition of Peoples. Essential Utilities completed the acquisition of Common Water on Aug 2, 2021, which added 980 customers. The company plans to invest $3 billion through 2023 to fortify water and natural gas operations as well as efficiently serve the expanding customer base.
Another water utility, Global Water Resources, Inc. (GWRS - Free Report) is taking the inorganic route to expand operations in the United States and making investments to upgrade its infrastructure. California Water Service (CWT - Free Report) has decided to invest in the range of $270-$300 million in 2021 and expand operations through strategic acquisitions. In June, the company inked a deal to acquire the assets of HOH Utilities Company, which in turn will expand the utility’s footprint in the island of Kauai.
Price Performance
Shares of American Water have outperformed the industry in the past 12 months.
Image Source: Zacks Investment Research
Zacks Rank
The company currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.