American Water Works Company Inc AWK subsidiary, Pennsylvania American Water, has signed an agreement to acquire Audubon Water Company. The transaction values Audubon at approximately $8 million.
Under the deal, an affiliate of Pennsylvania American Water will merge with Audubon, and shareholders of Audubon Water will receive shares of AWK in exchange for all of the issued and outstanding shares of Audubon.
Audubon is a private, investor-owned system serving about 2,900 customers in Lower Providence Township, Montgomery County.
Pennsylvania American Water will, over time, interconnect Audubon's system with its Royersford and Norristown systems, eliminating the system's reliance upon groundwater supply and the need for PFAS-related treatment upgrades.
This arrangement will provide a cleaner and more reliable water source for Audubon's customers as well as sufficient supply to support additional area growth.
Within the first five years of ownership, the company plans to invest more than $20 million into the system to upgrade aging water infrastructure.
"The interconnections, system upgrades and source of supply improvements we will accomplish through this acquisition will greatly benefit area customers, while further promoting regionalization and consolidation of our Montgomery County systems," said Pennsylvania American Water President Justin Ladner.
American Water held $794 million in cash and equivalents as of June 30, 2023.
Price Action: AWK shares closed lower by 2.66% at $133.55 on Thursday.
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