Eversource to sell water business in $2.4B deal
Steve Laschever
Eversource CEO Joe Nolan in his Prospect Street corner office in downtown Hartford.
Eversource Energy is getting out of the water business.
The Hartford- and Boston-based utility company said Monday night it has reached an agreement to sell its Aquarion Water Co. subsidiary to the New Haven-based South Central Connecticut Regional Water Authority in a $2.4 billion deal.
The sales price includes approximately $1.6 billion in cash and $800 million of net debt that will be extinguished at closing, the companies said.
Eversource said proceeds from the sale will allow it to pay down debt, “while efficiently reinvesting capital into its core electric and natural gas businesses, enabling additional investments in reliability for customers and strengthening Eversource’s financial position.”
As a result of the deal, Eversource also said it expects to record a loss on the sale of approximately $300 million in the fourth quarter of 2024. That includes an approximately $140 million income tax expense.
Eversource acquired Aquarion in 2017 in a deal valued at $1.675 billion. The company announced a year ago it may sell its water distribution business to “reduce equity needs and improve regulatory diversity.”
The sale comes as Eversource remains at odds with the Public Utilities Regulatory Authority over the agency’s ratemaking decisions.
“Since our acquisition of Aquarion in 2017, we have built on Aquarion’s longstanding track record of superior customer service, industry-leading reliability and operational success to help them become the largest investor-owned water utility in New England and seventh largest in the country,” said Eversource Chairman, President and CEO Joe Nolan.
Aquarion, headquartered in Bridgeport, serves nearly 250,000 water and wastewater customers in 72 cities and towns across Connecticut, Massachusetts and New Hampshire. It has more than 360 employees.
Both Aquarion and the Regional Water Authority have undergone recent leadership changes. Aquarion President Donald Morrissey announced he would step down at the end of last year.
And in November, Larry L. Bingaman, president and CEO of the Regional Water Authority, died following a brief illness. He was replaced on an interim basis by President and CEO Sunder Lakshminarayanan
Since owning the water company, Eversource said Aquarion has added approximately 30,000 customers through six acquisitions — including New England Service Company (CT, NH, MA) in 2021; The Torrington Water Company (CT) in 2022; and the Pinehills Water System in Plymouth (MA) in 2023.
Those deals grew the company’s rate base by about $200 million, Eversource said.
The sale is subject to regulatory approvals by the Connecticut Public Utilities Regulatory Authority, Massachusetts Department of Public Utilities, and New Hampshire Public Utilities Commission.
The companies said they expect the deal to close in late 2025.
Citi and Morgan Stanley & Co. LLC served as financial advisors to Eversource. Ropes & Gray LLP served as legal counsel to Eversource.
Barclays served as M&A advisor to AWA. Cravath, Swaine & Moore LLP served as legal counsel to AWA.
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