New York American Water, a business wing of
American Water Works Company, Inc.
), announced the acquisition of water and wastewater assets of the
Mt. Ebo Water Works, Inc. and Mt Ebo Sewage Works, Inc. The
financial aspects of the deal were kept under wraps.
The acquisition follows American Water's expansion of operations
into upstate New York, north of its Long Island base. The purchase
will enable American Water to deliver both water and wastewater
services to over 400 customers located in the Fieldstone Pond
condominium complex and Mt. Ebo Corporate Park in the Town of
Southeast, Putnam County.
American Water has been on an acquisition spree and further plans
to move ahead with its growth-by-acquisition strategy in the
future. The company intends to allocate $0.7 billion for the next
five years for strategic asset purchases.
American Water already maintains a healthy customer footprint in
New York and the latest acquisition will further broaden the
company's customer count. The addition of Mt Ebo Sewage assets to
New York American Water will contribute to economies of scale and
help reduce competition.
The company's acquisition strategy involves buying up assets in the
similar line of business, which will prove to be revenue accretive.
American Water recently inked a deal to purchase water and
wastewater assets from City of Millersburg, KY. and provide water
and wastewater service to the Millersburg County.
The flurry of asset acquisition will strengthen and boost American
Water's core offerings. In addition, American Water is focusing on
increasing its wastewater operations. The company in December
announced that in addition to water assets it will focus on
expanding its wastewater operations as well. Besides American
Water, another water utility going the acquisition route is
Consolidated Water Co. Ltd.
American Water is seeking to obtain water-related projects from the
military as well. Last year, the company won contracts worth $140
million and looks well-positioned for more contract flows as the
U.S. Defense Department might issue contracts worth $11 billion by
Currently, American Water Works carries a Zacks Rank #3 (Hold).
Other better-placed water utilities include
Artesian Resources Corp.
Connecticut Water Service Inc.
). Both these stocks sport a Zacks Rank #1 (Strong Buy).
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CONN WATER SVC (CTWS): Free Stock Analysis
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