Indiana American Water Completes Acquisition of Silver Creek Water Corporation

Rhea-AI Summary

Indiana American Water has completed its $45 million acquisition of Silver Creek Water (SCWC), adding approximately 8,000 new customers in Clark and Floyd Counties, Indiana. The acquisition, effective November 6, 2024, followed a member referendum where over 74% approved the sale. Former SCWC members will receive sale proceeds, and the Indiana Utility Regulatory Commission approved the transaction on September 4, 2024. This marks Indiana American Water's seventh acquisition in five years, offering customers enhanced services including water usage tools, flexible payment options, and access to the MyWater customer service portal.

Positive

• $45 million acquisition adds 8,000 new customers
• Strong member approval with 74% voting in favor
• Seventh successful acquisition in five years showing consistent growth strategy
• Immediate regulatory approval enables seamless service transition

Negative

• None.

Insights

Financial Analyst

The $45 million acquisition of Silver Creek Water represents a strategic expansion for Indiana American Water, adding approximately 8,000 new customers to their base. This deal follows a pattern of growth, marking their seventh acquisition in five years. The transaction's structure and strong member approval (74%) indicate a well-executed consolidation strategy.

The acquisition strengthens AWK's regulated utility footprint in Indiana, providing stable revenue streams and opportunities for operational synergies. The deal's valuation implies approximately $5,625 per customer, which aligns with industry standards for water utility acquisitions. This expansion should contribute positively to AWK's earnings through rate base growth and operational efficiencies, though the impact is relatively modest given AWK's $25.7 billion market cap.

Utility Infrastructure Expert

This acquisition exemplifies the ongoing consolidation trend in the water utility sector, where larger operators absorb smaller systems to achieve economies of scale. The integration brings several operational advantages:

• Enhanced technological capabilities for water quality monitoring
• Improved infrastructure maintenance and modernization
• Better access to capital for system upgrades

The transaction transforms a wholesale customer relationship into direct service provision, streamlining operations and potentially reducing costs. The strong member approval suggests a smooth transition and minimal integration risks.

Adds Nearly 8,000 New Customers and Welcomes New Employees

GREENWOOD, Ind.--(BUSINESS WIRE)-- Indiana American Water completed its $45 million acquisition of the Silver Creek Water Corporation (SCWC), as of November 6, 2024. The membership-owned water utility serves approximately 8,000 water customers from Silver Creek and Carr Townships in Clark County, and New Albany Township in Floyd County in southern Indiana.

“Silver Creek Water Corporation has been a highly valued wholesale water customer, and we are thrilled to welcome their customers and employees to Indiana American Water,” said Matthew Prine, president of Indiana American Water. “We look forward to providing our new customers with high-quality water service and a wide range of benefits, including water usage tools, flexible payment options, and the ability to report concerns and receive alerts through the MyWater customer service portal.”

The acquisition follows a member referendum in November 2023, where over 74 percent approved the sale to Indiana American Water. Former SCWC members will benefit from the sale proceeds distribution, which will be managed by the Silver Creek Water Corporation board of directors.

On September 4, 2024, the Indiana Utility Regulatory Commission (IURC) approved the sale, allowing Indiana American Water to serve SCWC customers immediately after the closing of the transaction.

“Selling the water system to Indiana American Water was not a decision that we took lightly. But it was not a decision that we could make alone. The members ultimately voted and determined that it was the right decision for our community,” said Doug Chumbler, board president of SCWC. “This professional company has the size and expertise to stay at the forefront of water quality and safety technologies, ensuring our systems remain modernized. This is crucial for providing safe, reliable, and affordable water services to residents.”

Customers will receive more information via mail soon. They can also watch a welcome video on YouTube by clicking here.

For more information, billing inquiries or account questions, customers can visit Indiana American Water’s website, under Customer Service & Billing.

Indiana American Water has completed seven acquisitions in the last five years. Selling to Indiana American Water is considered by some municipalities, private, or member-owned water and wastewater systems as advantageous due to factors such as long-term rate stability, access to capital, efficient operations, and the ability to leverage size and buying power to procure goods and services cost-effectively.

About American Water

American Water (NYSE: AWK) is the largest regulated water and wastewater utility company in the United States. With a history dating back to 1886, We Keep Life Flowing® by providing safe, clean, reliable and affordable drinking water and wastewater services to more than 14 million people with regulated operations in 14 states and on 18 military installations. American Water’s 6,500 talented professionals leverage their significant expertise and the company’s national size and scale to achieve excellent outcomes for the benefit of customers, employees, investors and other stakeholders.

For more information, visit amwater.com and join American Water on LinkedIn, Facebook, X and Instagram.

About Indiana American Water

Indiana American Water, a subsidiary of American Water, is the largest regulated water utility in the state, providing high-quality and reliable water and wastewater services to approximately 1.4 million people.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241106821817/en/

Media Contact:

Joel Reuter

External Affairs Manager

Indiana American Water

Office: (317) 885-2434

joel.reuter@amwater.com

Source: Indiana American Water

FAQ

How much did Indiana American Water pay for Silver Creek Water ?

Indiana American Water paid $45 million to acquire Silver Creek Water

How many customers did Indiana American Water gain from the Silver Creek acquisition?

The acquisition added approximately 8,000 new water customers from Silver Creek and Carr Townships in Clark County, and New Albany Township in Floyd County.

When did Indiana American Water complete the Silver Creek Water acquisition?

The acquisition was completed on November 6, 2024.

What percentage of Silver Creek Water members approved the sale?

Over 74% of members approved the sale to Indiana American Water in a November 2023 referendum.