American Water Works Unit Acquires Anna Meadows Assets - Analyst Blog

An American Water Works Company, Inc. (AWK) subsidiary, Missouri American Water, has acquired water and sewer systems from Anna Meadows Homeowners' Association. The assets are located near Moscow Mills, MO. The transaction was approved by the Missouri Public Service Commission on Nov 5, 2014.

Missouri American Water will integrate the acquired assets with its East Central Missouri Operation. East Central Missouri Operation operates in St. Charles, Warren and Jefferson Counties along with several other places.

The transaction will allow Missouri American Water to add around 75 customers to its portfolio over East Central Missouri Operation's existing number of roughly 49,000 customers. In addition, the inclusion of the Anna Meadows Homeowners' Association assets will help Missouri American Water to reap benefits from the existing facilities in this region and reduce competition.

American Water Works continues with its strategic acquisition program to expand its scale of operations. It attempts to acquire assets that are immediately accretive and in a similar line of business as its own.

On Dec 1, 2014, Illinois American Water, another subsidiary of American Water Works, acquired southern Illinois-based Hardin County Water Company, allowing the company to increase its customer base by around 500.

American Water Works completed as many as nine acquisitions in the first nine months of 2014, consisting of five regulated water systems, three regulated water and wastewater systems and one regulated wastewater system. These acquisitions have helped the company to add around 2,100 and 1,600 water and wastewater customers, respectively, to its regulated operations.

In the first nine months of 2014, American Water Works invested around $0.66 billion as capital expenditure. The company plans to invest a total of $6 billion between 2015 and 2019.

Positive impacts of these acquisitions have driven growth for American Water Works over the last several quarters. Systematic investments in acquisitions and upgrading existing operations are expected to improve the company's reliability and meet increasing customer demand, going forward.

American Water Works currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the industry include American States Water Company (AWR), Aqua America Inc. (WTR) and Artesian Resources Corporation (ARTNA), each carrying a Zacks Rank #2 (Buy).