Hawaii Water Service Receives Hawaii Public Utilities Commission Approval to Acquire Kapalua Water, Waste Treatment Companies

Rhea-AI Summary

Hawaii Water Service, a subsidiary of California Water Service Group (CWT), has received approval from the Hawaii Public Utilities Commission to acquire the assets of Kapalua Water Company and Kapalua Waste Treatment Company from Maui Land and Pineapple Company. This acquisition allows Hawaii Water to provide services to 1,000 connections in the Kapalua resort area, including homes and businesses. Hawaii Water currently serves 5,000 customers across various Hawaiian communities. This strategic acquisition aims to enhance service quality and expand operational capacity for future developments.

Positive

• Acquisition of Kapalua Water Company supports expansion into a key resort area.
• Ability to serve an additional 1,000 service connections enhances customer base.
• Strategic partnership with Maui Land and Pineapple Company may lead to future growth.

Negative

• Dependence on the successful completion of closing conditions could delay the acquisition.
• Operational risks in integrating Kapalua systems may affect performance.

WAIKOLOA, Hawaii, March 11, 2021 (GLOBE NEWSWIRE) -- Hawaii Water Service (Hawaii Water), a subsidiary of California Water Service Group (Group) (NYSE: CWT), received approval from the Hawaii Public Utilities Commission (Commission) this week to acquire the assets of Kapalua Water Company and Kapalua Waste Treatment Company from Maui Land and Pineapple Company (ML&P).

Pursuant to the agreement with ML&P and upon closing of the acquisition, which is subject to the remaining closing conditions in the agreement, Hawaii Water will provide water and wastewater service to approximately 1,000 service connections in the Kapalua, Maui, resort area. The utility systems serve homes, hotels, condominiums, golf courses, restaurants, and other resort amenities. Hawaii Water will also serve the expansion areas of Kapalua as they are developed by ML&P.

“We appreciate the Hawaii Public Utilities Commission’s diligence in reviewing and approving this agreement, and look forward to working with Maui Land and Pineapple Company to complete this transaction,” said Martin A. Kropelnicki, Group President and CEO. “We also look forward to providing the same quality, service, and value all of our Hawaii Water customers expect and deserve to ML&P’s Kapalua customers.”

Hawaii Water currently provides water, wastewater, and/or recycled water utility services to 5,000 customers, including a number of large resorts and condominium complexes, in the communities of Ka‘anapali, Pukalani, Kapolei, Waikoloa, North Kona Coast, and Kohala Coast on Maui, Oahu, and the Big Island, respectively. Hawaii Water has about 50 employees, who provide services including meter reading, water quality testing, water and wastewater treatment, water system design and construction, and customer service.

Hawaii Water is a wholly owned subsidiary of California Water Service Group, which also includes California Water Service, Washington Water Service, New Mexico Water Service, CWS Utility Services, and HWS Utility Services. Together, these companies provide regulated and non-regulated utility service to more than 2 million people in over 100 California, Washington, New Mexico, and Hawaii communities. Group’s common stock trades on the New York Stock Exchange under the symbol “CWT.” Additional information is available online at www.calwatergroup.com.

This news release contains forward-looking statements within the meaning established by the Private Securities Litigation Reform Act of 1995 ("Act"). The forward-looking statements are intended to qualify under provisions of the federal securities laws for "safe harbor" treatment established by the Act. Forward-looking statements are based on currently available information, expectations, estimates, assumptions and projections, and management's judgment about the Company, the water utility industry and general economic conditions. Such words as would, expects, intends, plans, believes, estimates, assumes, anticipates, projects, predicts, forecasts or variations of such words or similar expressions are intended to identify forward-looking statements. The forward-looking statements are not guarantees of future performance. They are subject to uncertainty and changes in circumstances. Actual results may vary materially from what is contained in a forward-looking statement. Factors that may cause a result different than expected or anticipated include, but are not limited to: ability to complete the acquisition and ability to operate the Kapalua water and wastewater systems in an accretive manner; natural disasters, public health crises, pandemics, epidemics or outbreaks of a contagious disease, such as the recent outbreak of coronavirus (or COVID‐19), governmental and regulatory commissions' decisions, including decisions on proper disposition of property; consequences of eminent domain actions relating to our water systems; changes in regulatory commissions' policies and procedures; the timeliness of regulatory commissions' actions concerning rate relief and other actions; changes in water quality standards; changes in environmental compliance and water quality requirements; electric power interruptions; housing and customer growth trends; the impact of opposition to rate increases; our ability to recover costs; availability of water supplies; issues with the implementation, maintenance or security of our information technology systems; civil disturbances or terrorist threats or acts; the adequacy of our efforts to mitigate physical and cyber security risks and threats; the ability of our enterprise risk management processes to identify or address risks adequately; labor relations matters as we negotiate with unions; changes in customer water use patterns and the effects of conservation; the impact of weather, climate, natural disasters, and diseases on water quality, water availability, water sales and operating results, and the adequacy of our emergency preparedness; and, other risks and unforeseen events. When considering forward-looking statements, you should keep in mind the cautionary statements included in this paragraph, as well as the annual 10-K, Quarterly 10-Q, and other reports filed from time-to-time with the Securities and Exchange Commission (SEC). The Company assumes no obligation to provide public updates of forward-looking statements.

Contact:
Yvonne Kingman, 310-257-1434 (media)
Tom Smegal, 408-367-8200 (analysts)

FAQ

What is the value of the acquisition by Hawaii Water Service from Maui Land and Pineapple Company?

The press release does not specify the acquisition value.

How many service connections will Hawaii Water serve after the acquisition?

Hawaii Water will serve approximately 1,000 additional service connections.

When was the acquisition approved by the Hawaii Public Utilities Commission?

The acquisition was approved on March 11, 2021.

What areas will Hawaii Water expand into with this acquisition?

The acquisition allows Hawaii Water to serve the Kapalua resort area in Maui.

What services will Hawaii Water provide after the acquisition?

Hawaii Water will provide water and wastewater services to the Kapalua area.