ALTON, Ill.--(BUSINESS WIRE)--Illinois American Water, a subsidiary of American Water (NYSE:AWK), has signed an asset purchase agreement today to acquire Alton’s regional wastewater system. Today’s agreement follows Wednesday night’s vote (7-1) by the Alton City Council in favor of Illinois American Water purchasing the regional wastewater system.
“I believe this transaction, approved by our council, is in the best interests of our city, now and in the future,” said Alton Mayor Brant Walker. “It allows us significant net proceeds to help fund other city needs and priorities. It also puts our wastewater system and its ongoing needs in professional hands with Illinois American Water, a company that is familiar with Alton and its residents.”
Walker added a key component of the deal is Illinois American Water’s commitment to continued employment for current city wastewater employees. There will be continued employment in current roles for all existing city employees as well as training, career advancement and professional development opportunities.
The total value of the proposed transaction is approximately $53.8 million, subject to certain adjustments provided in the agreement.
The Alton wastewater system serves approximately 23,000 customers, including customers in the nearby communities Bethalto and Godfrey.
Illinois American Water has owned, operated and maintained the water system serving Alton for the past 140 years.
“Illinois American Water appreciates the continued confidence the Alton City Council has shown in us by accepting our proposal,” said Karen Cooper, senior manager, Illinois American Water. “Illinois American Water is part of the Alton community. We have been providing water service here for more than 140 years. We are excited about the potential of broadening our partnership with the city to include wastewater. Alton has a proud history and tradition and a bright future. We look forward to our continued partnership.”
Illinois American Water and the City of Alton will seek approval of the acquisition from the Illinois Commerce Commission. Following approval, the deal could close in First Quarter 2019.
Cooper said Illinois American Water is committed to making capital improvements to the infrastructure of the wastewater system, including upgrades to the city’s wastewater treatment facility, pump station improvements, and completion of requirements set forth in the city’s long-term control plan included in Alton’s National Pollution Discharge Elimination System (NPDES) permit.
Bruce Hauk, president, Illinois American Water, said the company is committed to continued growth and economic development in the River Bend region, which includes Alton. A recent study by the University of Illinois said the sale of the wastewater system assets to Illinois American Water would mean $65.8 million overall economic impact in Alton in the first five years.
“This is an exciting acquisition for Illinois American Water and our team of employees in Alton and throughout the state of Illinois,” said Hauk.
Cautionary Statement Concerning Forward-Looking Statements.
Certain statements in this press release are forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements relate to, among other things, the execution of a definitive purchase agreement; the completion of the proposed acquisition; the ability to satisfy closing and other conditions related to the proposed transaction, including obtaining regulatory approvals; anticipated capital investments; and the ability to achieve certain benefits, synergies and goals relating to the transaction and the operations to be acquired. These statements are based on the current expectations of management of Illinois American Water. There are a number of risks and uncertainties that could cause actual results to differ materially from these forward-looking statements, including with respect to (1) obtaining the regulatory and other approvals required for the acquisition; (2) satisfying other conditions to the closing of the acquisition; (3) the occurrence of the benefits and synergies expected or predicted to occur as a result of the acquisition; (4) unexpected costs, liabilities or delays associated with the acquisition or the integration of the acquired business; (5) regulatory, legislative, local or municipal actions affecting the water and wastewater industries, which could adversely affect Illinois American Water; and (6) other economic, business and other factors. Forward-looking statements are not guarantees or assurances of future performance or results, and Illinois American Water and its affiliates do not undertake any duty to update any forward-looking statement
About Illinois American Water
Illinois American Water, a subsidiary of American Water (NYSE: AWK), is the largest investor-owned water utility in the state, providing high-quality and reliable water and/or wastewater services to approximately 1.3 million people. American Water also operates a customer service center in Alton and a quality control and research laboratory in Belleville. With a history dating back to 1886, American Water is the largest and most geographically diverse U.S. publicly traded water and wastewater utility company. The company employs more than 6,900 dedicated professionals who provide regulated and market-based drinking water, wastewater and other related services to an estimated 15 million people in 46 states and Ontario, Canada. American Water provides safe, clean, affordable and reliable water services to our customers to make sure we keep their lives flowing. For more information, visit amwater.com and follow American Water on Twitter, Facebook and LinkedIn.