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California Water to Buy Casa Loma & Palm Mutual Water Utility Assets
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California Water Service Group (CWT - Free Report) subsidiary, California Water Service (Cal Water) has signed agreements with Casa Loma Water Company and Palm Mutual Water Company to acquire both systems’ water utility assets.
Both acquisitions are subject to satisfactory closing conditions and approval by the California Public Utilities Commission. Cal Water intends to file a Tier 2 Advice Letter requesting the adoption of existing Cal Water rates for the new customers.
Key Details of the Agreement
Casa Loma provides services to about 900 individuals through 237 residential and 11 commercial customer relationships. The system is covered by Cal Water's current service region and is three miles from the company's Bakersfield Operations Center.
Following the completion of the acquisition, Cal Water will start distributing water to these new customers because it already has an agreement with Casa Loma. Cal Water has proposed to modernize the infrastructure to Cal Water standards and plans to build more interconnections to boost system pressure, which should improve water flow during a fire.
Palm Mutual serves 63 residential customers and is situated two miles from Cal Water's Northeast Bakersfield Treatment Plant. Palm Mutual does not own or run its own sources of supply. Hence, Cal Water currently provides Palm Mutual through a master meter connection. In order to support reliable and high-quality operations, Cal Water plans to gradually upgrade the system's infrastructure.
CWT Continues to Expand Operations Through Acquisitions
California Water’s primary focus is to expand operations in the western United States through acquisitions. It continues to explore new opportunities to expand regulated and non-regulated water and wastewater activities. The company makes strategic acquisitions to expand its operations and make necessary investments to upgrade the acquired assets to provide high-quality services to an expanding customer base and emergency firefighting requirements. California Water’s strategic acquisitions target new markets in high-growth regions.
In 2024, CWT acquired the water system assets of Kings Mountain Park Mutual Water Company. In the same year, Hawaii Water Service, a subsidiary of CWT, acquired Kukui'ula South Shore Community Services' wastewater system assets. These acquisitions represent CWT's continued growth through the purchase of water and wastewater infrastructure.
The company plans to invest $660 million in 2025 to further strengthen its operations and $2.06 billion during 2025-2027.
The Aging Water Sector Can Benefit From Mergers
According to the American Society of Civil Engineers, there are nearly 50,000 community water systems and 14,000 wastewater treatment systems in the United States. These systems play a crucial role in providing clean drinking water and treating wastewater, which are essential for public health and the environment. Some service providers are too small and financially weak to make necessary and expensive repairs on time, which increases the risk of contamination, breaks pipelines and disrupts services. Due to the delay in pipeline repairs and maintenance, billions of gallons of treated water are lost every year in the country.
Large water utility companies are acquiring smaller rivals to ensure that customers receive high-quality services and that the necessary funds are available to upgrade both acquired and outdated infrastructure. Further consolidation is required to benefit from the poor pace of mergers and acquisitions.
Here are some other companies that are also expanding operations through acquisitions:
In May 2025, American Water Works’ (AWK - Free Report) subsidiary, California American Water, completed its acquisition of the Mesa Del Sol water system in the Corral de Tierra area of Salinas. The acquisition has added 15 new water connections to the company’s current customer base, which already includes nearly 40,000 connections on the Monterey Peninsula and other parts of Monterey County.
AWK’s long-term (three to five years) earnings growth rate is 7.4%. The Zacks Consensus Estimate for 2025 earnings per share (EPS) implies year-over-year growth of 6.1%.
In April 2025, Middlesex Water Company (MSEX - Free Report) announced that its unit, Tidewater Utilities, Inc., has acquired the water assets of Town of Ocean View (“TOV”) in Sussex County, DE, for $4.6 million. The acquisition of TOV’s assets will expand Middlesex Water’s operation in Delaware and add 900 customers to its existing base.
MSEX’s long-term earnings growth rate is 6.1%. The Zacks Consensus Estimate for 2025 EPS implies year-over-year growth of 2.4%.
Since 2015, Essential Utilities (WTRG - Free Report) has added more than 129,000 new customers or equivalent dwelling units to its footprint through acquisitions. It has a significant backlog of pending acquisitions, including five signed purchase agreements for wastewater systems, expected to add over 210,000 customers and total approximately $340 million.
WTRG’s long-term earnings growth rate is 5.18%. The Zacks Consensus Estimate for 2025 EPS implies year-over-year growth of 6.6%.
CWT’s Stock Price Performance
In the past three months, shares of the company have risen 1.3% compared with the industry’s 5.1% growth.
Image: Bigstock
California Water to Buy Casa Loma & Palm Mutual Water Utility Assets
California Water Service Group (CWT - Free Report) subsidiary, California Water Service (Cal Water) has signed agreements with Casa Loma Water Company and Palm Mutual Water Company to acquire both systems’ water utility assets.
Both acquisitions are subject to satisfactory closing conditions and approval by the California Public Utilities Commission. Cal Water intends to file a Tier 2 Advice Letter requesting the adoption of existing Cal Water rates for the new customers.
Key Details of the Agreement
Casa Loma provides services to about 900 individuals through 237 residential and 11 commercial customer relationships. The system is covered by Cal Water's current service region and is three miles from the company's Bakersfield Operations Center.
Following the completion of the acquisition, Cal Water will start distributing water to these new customers because it already has an agreement with Casa Loma. Cal Water has proposed to modernize the infrastructure to Cal Water standards and plans to build more interconnections to boost system pressure, which should improve water flow during a fire.
Palm Mutual serves 63 residential customers and is situated two miles from Cal Water's Northeast Bakersfield Treatment Plant. Palm Mutual does not own or run its own sources of supply. Hence, Cal Water currently provides Palm Mutual through a master meter connection. In order to support reliable and high-quality operations, Cal Water plans to gradually upgrade the system's infrastructure.
CWT Continues to Expand Operations Through Acquisitions
California Water’s primary focus is to expand operations in the western United States through acquisitions. It continues to explore new opportunities to expand regulated and non-regulated water and wastewater activities. The company makes strategic acquisitions to expand its operations and make necessary investments to upgrade the acquired assets to provide high-quality services to an expanding customer base and emergency firefighting requirements. California Water’s strategic acquisitions target new markets in high-growth regions.
In 2024, CWT acquired the water system assets of Kings Mountain Park Mutual Water Company. In the same year, Hawaii Water Service, a subsidiary of CWT, acquired Kukui'ula South Shore Community Services' wastewater system assets. These acquisitions represent CWT's continued growth through the purchase of water and wastewater infrastructure.
The company plans to invest $660 million in 2025 to further strengthen its operations and $2.06 billion during 2025-2027.
The Aging Water Sector Can Benefit From Mergers
According to the American Society of Civil Engineers, there are nearly 50,000 community water systems and 14,000 wastewater treatment systems in the United States. These systems play a crucial role in providing clean drinking water and treating wastewater, which are essential for public health and the environment. Some service providers are too small and financially weak to make necessary and expensive repairs on time, which increases the risk of contamination, breaks pipelines and disrupts services. Due to the delay in pipeline repairs and maintenance, billions of gallons of treated water are lost every year in the country.
Large water utility companies are acquiring smaller rivals to ensure that customers receive high-quality services and that the necessary funds are available to upgrade both acquired and outdated infrastructure. Further consolidation is required to benefit from the poor pace of mergers and acquisitions.
Here are some other companies that are also expanding operations through acquisitions:
In May 2025, American Water Works’ (AWK - Free Report) subsidiary, California American Water, completed its acquisition of the Mesa Del Sol water system in the Corral de Tierra area of Salinas. The acquisition has added 15 new water connections to the company’s current customer base, which already includes nearly 40,000 connections on the Monterey Peninsula and other parts of Monterey County.
AWK’s long-term (three to five years) earnings growth rate is 7.4%. The Zacks Consensus Estimate for 2025 earnings per share (EPS) implies year-over-year growth of 6.1%.
In April 2025, Middlesex Water Company (MSEX - Free Report) announced that its unit, Tidewater Utilities, Inc., has acquired the water assets of Town of Ocean View (“TOV”) in Sussex County, DE, for $4.6 million. The acquisition of TOV’s assets will expand Middlesex Water’s operation in Delaware and add 900 customers to its existing base.
MSEX’s long-term earnings growth rate is 6.1%. The Zacks Consensus Estimate for 2025 EPS implies year-over-year growth of 2.4%.
Since 2015, Essential Utilities (WTRG - Free Report) has added more than 129,000 new customers or equivalent dwelling units to its footprint through acquisitions. It has a significant backlog of pending acquisitions, including five signed purchase agreements for wastewater systems, expected to add over 210,000 customers and total approximately $340 million.
WTRG’s long-term earnings growth rate is 5.18%. The Zacks Consensus Estimate for 2025 EPS implies year-over-year growth of 6.6%.
CWT’s Stock Price Performance
In the past three months, shares of the company have risen 1.3% compared with the industry’s 5.1% growth.
Image Source: Zacks Investment Research
CWT’s Zacks Rank
California Water currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.