Aqua America Subsidiary Announces Acquisition of Tri-State Grouting For $3M In Cash With Certain Revenue Growth Requirements
Aqua Resources, Inc., the unregulated subsidiary of Aqua America, Inc.
(NYSE: WTR) today announced that it has purchased Tri-State Grouting LLC
(TSG) of Newark, DE, which specializes in storm and wastewater
infrastructure and rehabilitation. The purchase price is approximately $3
million in cash with certain revenue growth requirements. Current TSG
revenues are $6 million annually.
TSG will remain in Newark and all of current TSG management will remain with
the company following the acquisition. Aqua Resources will provide executive
management, engineering expertise and capital to support and help grow the
TSG business line.
"This agreement both fulfills Aqua's core business model of
growth-through-acquisition and supports the model by providing another
avenue and skill set that will allow us to continue to increase
opportunities for our regulated and non-regulated businesses," said Aqua
America Chairman and CEO Nicholas DeBenedictis. "Our Aqua Resources unit
already provides a wide array of services to the water and wastewater
industry including operations and maintenance contracts, liquid waste
hauling and water and wastewater system repair and maintenance. The specific
services provided by TSG will complement these services by adding another
specialty to our current menu of services."
"Delaware is home to many large and successful companies, but our state's
economy relies on our strong, durable small business sector. With 37 years
of quality service to its name, Tri-State Grouting is the epitome of the
Delaware small business," Delaware Governor Jack Markell said. "We're happy
to see that this tradition of excellence will continue here, with Tri-State
Grouting's management staying in place to make the acquisition with Aqua
The market for storm and wastewater infrastructure and rehabilitation
services is in high demand due to the nation's rapidly aging infrastructure.
The American Society of Civil Engineers (ASCE) estimates the U.S. will need
to spend $298 billion on wastewater and storm water systems over the next 20
years. "We are excited about the purchase by Aqua, which has the engineering
expertise and financial wherewithal to support our existing business and
help the company continue to grow," said TSG President Mark Schneider.
TSG has been in business since 1977 and has 35 employees. It currently does
business in six states, including Pennsylvania, as an example, where the
ASCE recently graded the state's wastewater infrastructure a D-. The entire
Mid-Atlantic region is plagued with aging infrastructure and will need to
invest billions of dollars to address clean water standards.
TSG specializes in the cleaning, televising and trenchless repair of storm
and sanitary sewer pipe and appurtenances. The company televises more than 1
million lineal feet of pipe annually ranging in size from 4 to 60 inches.
Aqua America has completed seven regulated acquisitions to date in 2014, and
more than 300 acquisitions company-wide since 1995. Last year, Aqua America
completed 15 water and wastewater acquisitions and grew its number of
customers a total of 1.3 percent.
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