NW Natural Water Announces Acquisition of Puttman Infrastructure and Infrastructure Capital Holdings
NW Natural Water, a subsidiary of Northwest Natural Holding Company (NYSE:NWN), has agreed to acquire Infrastructure Capital Holdings (ICH), including Puttman Infrastructure's assets. This acquisition will add around 4,200 water, wastewater, and recycled water customers across Oregon, Idaho, and California, potentially expanding to 19,000 connections.
Tom Puttman, current president of Puttman Infrastructure and ICH, will become president of NW Natural Water post-closure, expected in Q3 2024. The acquisition marks NW Natural Water’s first investment in the recycled water segment and entrance into the California market.
The deal aims to enhance NW Natural Water’s utility portfolio and services, with a focus on sustainable infrastructure and long-term growth opportunities.
- Acquisition adds approximately 4,200 new customers, expanding to 19,000 connections at full buildout.
- Expansion into the recycled water market and entry into California broadens NW Natural Water’s market presence.
- Tom Puttman, with significant experience in sustainable infrastructure, will join as president of NW Natural Water.
- Potential for incremental investments in high-growth areas.
- Enhances NW Natural Water's utility management expertise and project delivery capabilities.
- Integration risks associated with the acquisition of ICH and Puttman Infrastructure.
- No specific financial terms of the acquisition disclosed, leading to uncertainty regarding the impact on NWN's financials.
- The acquisition's benefits are conditional on successful expansion and customer acquisition.
Insights
The acquisition of Puttman Infrastructure and Infrastructure Capital Holdings represents a strategic move for NW Natural Water to expand its footprint in the water, wastewater and recycled water markets across Oregon, Idaho and California. This acquisition will increase NW Natural Water's customer base by approximately 4,200 customers, with an expectation to reach 19,000 connections at full buildout. From a financial perspective, this expansion into new markets and services suggests potential revenue growth and increased market share.
However, investors should critically evaluate the financial implications, including the cost of the acquisition and the integration costs. The statement that Puttman offers a pipeline of long-term growth opportunities is promising but requires detailed scrutiny of projected financials to ensure they align with the overall strategic goals and provide expected returns. Investors should also monitor how this acquisition impacts NW Natural's debt levels and cash flow in the short term.
Moreover, the entry into the recycled water segment could open up new revenue streams, but it's important to consider the regulatory landscape and the costs associated with developing this segment. If executed well, this acquisition could position NW Natural Water as a significant player in the sustainable infrastructure market, helping diversify its revenue base and reduce dependence on traditional water and wastewater services.
This acquisition marks NW Natural Water's first step into the California market and the recycled water segment, which are both significant milestones. California has a large and diverse market with substantial demand for water services, especially in the context of increasingly frequent droughts and water scarcity issues. Expanding into this state could offer NW Natural Water a substantial customer base and strong growth potential.
Additionally, the emphasis on the recycled water segment aligns with broader industry trends towards sustainability and innovative water management solutions. Recycled water is a growing market due to increasing environmental regulations and the need for sustainable water resources. This move positions NW Natural Water to capitalize on these trends, potentially offering a competitive edge over traditional water providers.
Investors should note the opportunities for incremental investments mentioned in high-growth areas. This could translate to continuous expansion and revenue growth if the market dynamics and execution strategies align effectively. However, venturing into new markets always comes with risks, including market entry barriers, regulatory hurdles and the challenge of establishing a strong market presence quickly.
In the broader context, this acquisition reflects NW Natural Water's strategic shift towards diversification and sustainability, which could enhance its market positioning and appeal to environmentally-conscious investors.
Tom Puttman to join company as president of NW Natural Water
A leader in the sustainable infrastructure market, Puttman has significant experience investing, developing and operating innovative water, wastewater and recycled water systems and has rapidly grown the ICH utility portfolio across the western
“Our acquisition of Puttman and ICH strategically expands our presence into the recycled water market, enhances our existing water and wastewater services business, and provides further opportunities for incremental investments in high-growth areas,” said Justin B. Palfreyman, president of NW Natural Holdings. “In addition, the Puttman platform offers us a tremendous pipeline of long-term growth and development opportunities while enhancing our utility management expertise, innovative thinking and project delivery capabilities.”
“I’d like to sincerely thank Justin Palfreyman for his leadership and dedication to NW Natural Water over the last six years,” said David H. Anderson, CEO of NW Natural Holdings. “He’s grown NW Natural Water into one of the top 20 largest privately held water companies in
Tom Puttman said, “Joining NW Natural Water reflects an exciting next step for our two companies. I’m looking forward to being part of a strong and growing water company and leading its team in the next phase of expansion. I believe NW Natural Water has the financial strength, resources, expertise and values to meet the long-term needs of the communities we serve."
The transaction is expected to close in the third quarter of 2024 with Mr. Puttman joining NW Natural Water at that time.
About NW Natural Holdings
Northwest Natural Holding Company, (NYSE: NWN) (NW Natural Holdings), is headquartered in
NW Natural is a local distribution company that currently provides natural gas service to approximately 2.5 million people in more than 140 communities through more than 800,000 meters in
NW Natural Water provides water distribution and wastewater services to communities throughout the Pacific Northwest,
Additional information is available at nwnaturalholdings.com.
Forward-Looking Information
This press release, and other releases and presentations made by NW Natural Holdings from time to time, may contain forward-looking statements within the meaning of the
Forward-looking statements are based on our current expectations and assumptions regarding NW Natural Holdings’ business, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. NW Natural Holdings’ actual results may differ materially from those contemplated by the forward-looking statements. We caution you therefore against relying on any of these forward-looking statements. They are neither statements of historical fact nor guarantees or assurances of future performance. Important factors that could cause actual results to differ materially from those in the forward-looking statements are discussed by reference to the factors described in Part I, Item 1A “Risk Factors,” and Part II, Item 7 and Item 7A “Management's Discussion and Analysis of Financial Condition and Results of Operations” and “Quantitative and Qualitative Disclosures about Market Risk” in NW Natural Holdings’ most recent Annual Report on Form 10-K, as updated by subsequent filed reports, and in Part I, Items 2 and 3 “Management's Discussion and Analysis of Financial Condition and Results of Operations” and “Quantitative and Qualitative Disclosures About Market Risk,” and Part II, Item 1A, “Risk Factors,” in NW Natural Holdings’ quarterly reports filed thereafter.
All forward-looking statements made in this report and all subsequent forward-looking statements, whether written or oral and whether made by or on behalf of NW Natural Holdings, are expressly qualified by these cautionary statements. Any forward-looking statement speaks only as of the date on which such statement is made, and NW Natural Holdings undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law. New factors emerge from time to time and it is not possible for NW Natural Holdings to predict all such factors, nor can it assess the impact of each such factor or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statements.
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Investor Contact:
Nikki Sparley
Phone: 503-721-2530
Email: nikki.sparley@nwnatural.com
Media Contact:
David Roy
Phone: 503-610-7157
Email: david.roy@nwnatural.com
Source: NW Natural
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