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California Water (CWT) Arm Gets Nod to Acquire HOH Utilities
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California Water Service Group’s (CWT - Free Report) unit, Hawaii Water Service, has received regulatory approval from the Hawaii Public Utilities Commission to acquire the assets of HOH Utilities, LLC. This acquisition will further expand California Water Service’s operation in Kauai County. The asset sale is subject to customary closing conditions.
The acquisition of HOH Utilities’ assets will add 1800 customers to CWT’s existing customer base in California.
Operation Expansion
Before this acquisition, in June 2022, California Water Service’s another unit, Texas Water Service, in collaboration with BVRT Utility, further expanded its customer base by closing the acquisition of Railyard Utility's wastewater system. The acquisition added 345 customers to California Water Service’s existing customer base in California, and the utility anticipates serving an additional 150 customers once the community is built.
California Water Service’s customer base increased year over year by 0.8% in 2021. The company is making efforts to expand operations organically and inorganically. CWT’s customer base is likely to further expand in 2022.
Huge investment is required to upgrade the aging water and wastewater infrastructure, and California Water Service is making systematic investments to further strengthen its infrastructure. The company invested $293.2 million in 2021 and $68.5 million in the first three months of 2022. The utility also expects to invest $1,080 million in the 2022-2024 period for infrastructure upgrades.
Zacks Rank & Price Performance
California Water Service presently has a Zacks Rank #4 (Sell). In the past month, shares of CWT have risen 4.2% against the industry’s decline of 2.7%.
Per the Environmental Protection Agency, at present, more than 51,000 community water systems and 16,000 community wastewater systems in the United States are providing water solutions for customers. The highly fragmented water industry creates operational challenges as a large portion of water and wastewater infrastructure is nearing the end of an effective service life.
The acquisition of small units by larger utilities ensures necessary investments for the upgrade of infrastructure and the continuation of high-quality services for customers. Some companies in the water industry expanding operations through acquisitions are American Water Works (AWK - Free Report) , Essential Utilities (WTRG - Free Report) and SJW Group (SJW - Free Report) .
American Water Works continues to widen its market footprint through strategic acquisitions. In July 2022, AWK has acquired the wastewater system assets of Upper Pottsgrove Township, Montgomery County, PA. The acquisition is expected to add 1,550 wastewater customers to American Water Works’ existing 2.4 million customer base.
During the six years ended Dec 31, 2021, Essential Utilities expanded utility operations by completing many water and wastewater acquisitions, which, in turn, added 94,000 new customers. In the first quarter of 2022, the company completed one acquisition, which added 11,000 customers.
In January 2022, SJW Group closed the acquisition of Texas Country Water in Comal, TX. The acquisition added more than 1,900 water and wastewater customers to the existing customer base. This is the fourth Texas acquisition by SJW Group in the past 12 months.
The Zacks Consensus Estimate for AWK, WTRG and SJW’s 2022 earnings implies year-over-year growth of 4.9%, 6.6% and 15.8%, respectively.
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California Water (CWT) Arm Gets Nod to Acquire HOH Utilities
California Water Service Group’s (CWT - Free Report) unit, Hawaii Water Service, has received regulatory approval from the Hawaii Public Utilities Commission to acquire the assets of HOH Utilities, LLC. This acquisition will further expand California Water Service’s operation in Kauai County. The asset sale is subject to customary closing conditions.
The acquisition of HOH Utilities’ assets will add 1800 customers to CWT’s existing customer base in California.
Operation Expansion
Before this acquisition, in June 2022, California Water Service’s another unit, Texas Water Service, in collaboration with BVRT Utility, further expanded its customer base by closing the acquisition of Railyard Utility's wastewater system. The acquisition added 345 customers to California Water Service’s existing customer base in California, and the utility anticipates serving an additional 150 customers once the community is built.
California Water Service’s customer base increased year over year by 0.8% in 2021. The company is making efforts to expand operations organically and inorganically. CWT’s customer base is likely to further expand in 2022.
Huge investment is required to upgrade the aging water and wastewater infrastructure, and California Water Service is making systematic investments to further strengthen its infrastructure. The company invested $293.2 million in 2021 and $68.5 million in the first three months of 2022. The utility also expects to invest $1,080 million in the 2022-2024 period for infrastructure upgrades.
Zacks Rank & Price Performance
California Water Service presently has a Zacks Rank #4 (Sell). In the past month, shares of CWT have risen 4.2% against the industry’s decline of 2.7%.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Image Source: Zacks Investment Research
Acquisitions by Water Utilities
Per the Environmental Protection Agency, at present, more than 51,000 community water systems and 16,000 community wastewater systems in the United States are providing water solutions for customers. The highly fragmented water industry creates operational challenges as a large portion of water and wastewater infrastructure is nearing the end of an effective service life.
The acquisition of small units by larger utilities ensures necessary investments for the upgrade of infrastructure and the continuation of high-quality services for customers. Some companies in the water industry expanding operations through acquisitions are American Water Works (AWK - Free Report) , Essential Utilities (WTRG - Free Report) and SJW Group (SJW - Free Report) .
American Water Works continues to widen its market footprint through strategic acquisitions. In July 2022, AWK has acquired the wastewater system assets of Upper Pottsgrove Township, Montgomery County, PA. The acquisition is expected to add 1,550 wastewater customers to American Water Works’ existing 2.4 million customer base.
During the six years ended Dec 31, 2021, Essential Utilities expanded utility operations by completing many water and wastewater acquisitions, which, in turn, added 94,000 new customers. In the first quarter of 2022, the company completed one acquisition, which added 11,000 customers.
In January 2022, SJW Group closed the acquisition of Texas Country Water in Comal, TX. The acquisition added more than 1,900 water and wastewater customers to the existing customer base. This is the fourth Texas acquisition by SJW Group in the past 12 months.
The Zacks Consensus Estimate for AWK, WTRG and SJW’s 2022 earnings implies year-over-year growth of 4.9%, 6.6% and 15.8%, respectively.