American Water Works Company, Inc.
) continues to follow steady acquisition route to expand its
asset base. The company's subsidiary Illinois American Water has
acquired the City of Grafton water system. The company invested
$1.8 million for the acquisition.
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The City of Grafton water system is located near Alton in
Southern Illinois. In Dec 2012, Illinois American Water and the
City of Grafton entered into an agreement to acquire the city's
water system. Subsequently, the agreement was approved by the
Illinois Commerce Commission.
Illinois American Water and the City of Grafton water system have
a longstanding relationship. Previously, Illinois American Water
supplied water on a sale-for-resale (wholesale) basis to the
customers of the city.
For more than 135 years, Illinois American Water has supplied
water to the customers in the Alton district, which was served by
the City of Grafton water system.
The acquisitions will enable Illinois American Water to enrich
its customer base with approximately 400 customers in the Alton
District and serve a population of roughly 600 residents. Post
acquisition, the company will directly provide water to the
customers. The inclusion of the water systems will help the
company to reap benefits from its existing facilities in the
We note that American Water Works is continuously acquiring new
assets. The company expects to incur $0.8 billion to $1 billion
per year under capital expenditure program, out of which a part
is set aside for strategic acquisitions.
Last week, American Water Works' another subsidiary Pennsylvania
American Water bought three water and wastewater systems - Clean
Treatment Sewage Company, a private water system and the assets
of the Franklin Township Municipal Sewer Authority. The company
spent nearly $6.9 million for these transactions.
American Water Works' continuous effort towards addition of new
infrastructure and improvement of the existing assets will enable
the company to provide uninterrupted utility services to its
customers while strengthening system capability. These factors
will subsequently boost reliability and public safety, while
maintaining government's water quality standard.
American Water Works currently has a Zacks Rank # 3 (Hold).
However, other water utilities that are worth considering include
Connecticut Water Service Inc.
) with a Zacks Rank #1 (Strong Buy), and
Water Co. Ltd.
), each with a Zacks Rank #2 (Buy).
Voorhees, N.J.-based American Water Works was founded in 1886.
The company serves around 14 million people with water and