Indiana American Water Receives Commission Approval for Acquisition of Silver Creek Water Corporation

Rhea-AI Summary

Indiana American Water (INAW) has received approval from the Indiana Utility Regulatory Commission for the $45 million acquisition of Silver Creek Water (SCWC). The deal, expected to close by mid-November, will add approximately 8,000 water customers in Clark and Floyd Counties to INAW's service area. This acquisition aligns with INAW's Southern Indiana Operations, as SCWC has been a long-time wholesale water customer. INAW President Matt Prine emphasized the benefits for regional growth and service reliability. The merger follows a vote by SCWC members favoring INAW as their new water service provider. Post-closing, INAW will distribute welcome kits to new customers with essential information about their service and account details.

Positive

• Acquisition expands INAW's customer base by approximately 8,000
• Strategic fit with existing Southern Indiana Operations
• Potential for improved service reliability and regional growth
• Seamless transition expected due to existing wholesale relationship

Negative

• Significant capital outlay of $45 million for the acquisition

Insights

Financial Analyst

The $45 million acquisition of Silver Creek Water (SCWC) by Indiana American Water (INAW) is a strategic move that expands INAW's customer base by 8,000 in Clark and Floyd Counties. This deal, representing about 4% of INAW's current customer base, should provide economies of scale and potential revenue synergies. The acquisition's impact on INAW's parent company, American Water Works, is likely to be marginal given its size. However, it demonstrates the company's commitment to growth through targeted acquisitions in fragmented markets. Investors should watch for potential rate adjustments and integration costs in the short term, balanced against long-term benefits from increased operational efficiency and expanded service area.

Market Research Analyst

This acquisition aligns with the ongoing consolidation trend in the U.S. water utility sector. As smaller utilities face challenges in meeting regulatory requirements and infrastructure needs, larger players like INAW are stepping in. The deal's approval by the Indiana Utility Regulatory Commission signals a favorable regulatory environment for such consolidations. For investors, this trend suggests potential for steady growth and improved service quality in the water utility sector. The mid-November closing timeline indicates a smooth regulatory process, which is positive for future acquisition prospects. Stakeholders should monitor how efficiently INAW integrates SCWC's operations and whether this leads to improved service metrics or cost savings in the Southern Indiana region.

GREENWOOD, Ind.--(BUSINESS WIRE)-- Indiana American Water (INAW) received approval from the Indiana Utility Regulatory Commission (IURC) for the acquisition of the Silver Creek Water Corporation (SCWC) for $45 million.

“The acquisition of the Silver Creek Water Corporation is a natural fit as part of our Southern Indiana Operations. SCWC has been a valued wholesale water customer of Indiana American Water for years and our merged operations will continue to benefit the region’s growth and service reliability,” said Matt Prine, President of Indiana American Water. “We look forward to welcoming our new customers, along with a tremendous group of SCWC employees who will be joining our team.”

The closing is expected by mid-November and comes nearly a year after members of the SCWC voted in favor of INAW to become their provider of water service to customers in Clark and Floyd Counties in southern Indiana. Under the agreement, approximately 8,000 water customers will be joining the nearly 1 in 5 Hoosiers currently served by INAW.

Once the closing is complete, INAW will provide customers with a welcome kit that includes educational and other materials on their service, billing and other account details.

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/20240905419695/en/

Media:

Joel Reuter

External Affairs Manager

Indiana American Water

Office: (317) 885-2434

joel.reuter@amwater.com

Source: Indiana American Water

FAQ

What is the value of Indiana American Water's acquisition of Silver Creek Water ?

Indiana American Water is acquiring Silver Creek Water for $45 million.

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

Indiana American Water will gain approximately 8,000 new water customers from the acquisition of Silver Creek Water

When is the closing date for Indiana American Water's acquisition of Silver Creek Water ?

The closing for the acquisition is expected by mid-November, following the Indiana Utility Regulatory Commission's approval.

Which counties in Indiana will be affected by Indiana American Water's acquisition of Silver Creek Water ?

The acquisition will affect water customers in Clark and Floyd Counties in southern Indiana.