Eversource Energy has announced a definitive agreement to sell Aquarion Water Company (Aquarion) to the Aquarion Water Authority (AWA), a newly established, quasi-public corporation and political subdivision of the State of Connecticut.
AWA will operate as a standalone water authority alongside the South Central Connecticut Regional Water Authority (RWA).
The transaction, subject to certain closing adjustments, assigns an aggregate enterprise value of approximately $2.4bn to the sale.
This figure includes $1.6bn in cash and $800m in net debt to be extinguished at closing, representing 1.7 times Aquarion’s rate base as of December 2024.
Eversource intends to use the proceeds to reduce parent company debt while reinvesting capital into its core electric and natural gas businesses.
These efforts aim to bolster reliability for customers and enhance Eversource’s financial position. However, the company anticipates recording a loss of approximately $300m on the sale in its fourth-quarter 2024 results. This loss includes an estimated $140m in income tax expenses. Despite this, Eversource has reaffirmed its long-term earnings-per-share (EPS) growth target of 5% to 7% through 2028.
Eversource chairman, president and CEO Joe Nolan said: “Since our acquisition of Aquarion in 2017, we have built on Aquarion’s longstanding track record of superior customer service, industry-leading reliability and operational success to help them become the largest investor-owned water utility in New England and seventh largest in the country.
“I would like to thank the Aquarion leadership team for its sound management and financial stewardship of the company and extend my sincere gratitude to all Aquarion employees for their tireless, customer-first focus on safety and exceptional service, consistent with our core values at Eversource. By prioritising prudent investments with a focus on affordability, we’ve worked together to ensure Aquarion’s water service is among the best in New England.”
Headquartered in Bridgeport, Connecticut, Aquarion serves nearly 250,000 water and wastewater customers across 72 cities and towns in Connecticut, Massachusetts, and New Hampshire. The company employs over 360 individuals and provides safe, reliable services to more than 775,000 people.
Aquarion’s origins date back to 1857 through its predecessor, the Bridgeport Hydraulic Company.
Since its acquisition by Eversource in 2017, Aquarion has expanded its operations, adding around 30,000 customers through acquisitions such as New England Service Company (2021), The Torrington Water Company (2022), and the Pinehills Water System in Plymouth, Massachusetts (2023). These acquisitions collectively increased Aquarion’s rate base by approximately $200m.
Additionally, Aquarion entered the wastewater sector, acquiring the Town of New Hartford’s municipal water and wastewater systems in 2023 and the City of Ansonia’s municipal wastewater system in 2024.
The sale remains subject to regulatory approvals from the Connecticut Public Utilities Regulatory Authority, the Massachusetts Department of Public Utilities, and the New Hampshire Public Utilities Commission. Other approvals under the Hart-Scott-Rodino Antitrust Improvements Act and customary closing conditions are also required. The transaction is expected to close by late 2025.
Citi and Morgan Stanley & Co acted as financial advisors to Eversource Energy, with Ropes & Gray providing legal counsel. For AWA, Barclays served as M&A advisor, and Cravath, Swaine & Moore acted as legal counsel.
