Liberty Water to Buy Water Utility Systems in US
Total consideration for the three acquisitions is $8.3m.
These acquisitions, Louisiana Land and Water (LLW), Noel Water Company, and KMB Utilities Company (KMB), will add approximately 7,400 customer connections to the Liberty Water family.
LLW, the largest of the three utilities serving approximately 6,000 customers near Monroe, Louisiana, and KMB located in Missouri, both own and operate regulated water distribution and waste-water collection and treatment utility systems; Noel participates solely in the regulated water distribution utility business in Missouri.
LLW, Noel, and KMB are anticipated to have net regulatory assets for rate making purposes at closing of approximately $6.5m, $0.7m, and $0.3m respectively, representing a consolidated purchase price multiple of net regulatory assets of approximately 1.09x.
With the consent of the Louisiana regulator, LLW will file a rate case promptly after closing of the acquisition with recent rate cases in Louisiana providing return on equity of approximately 9.5-11 percent.
At the Missouri facilities, recent rate cases have provided return on equity of 9.5 percent and 11.3 percent for Noel and KMB respectively.
Closings of the acquisitions are subject to certain conditions including state regulatory approval, and are expected to occur in the fall of 2011.
Ian Robertson, CEO of APUC, said: â€œThe acquisition of these attractive water and waste-water utilities businesses represents the continuation of APUC's regulated utility growth strategy and Liberty Water's objective to acquire assets in states with supportive regulatory environments.
â€œThese facilities, which increase Liberty Water's customer count by approximately 10 percent, will be able to benefit from operation and administration synergies with our other nearby facilities in Texas and Missouri.â€
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