Eversource Energy to Sell Aquarion Water Company to Aquarion Water Authority in $2.4 Billion Deal
Eversource Energy has recently announced the signing of a definitive agreement to sell Aquarion Water Company, a significant move that reflects its strategy of refocusing on its core electric and natural gas operations. The buyer, Aquarion Water Authority (AWA), is a quasi-public entity, a political subdivision of the State of Connecticut. AWA is also a newly created, standalone water authority, operating alongside the South Central Connecticut Regional Water Authority (RWA). This deal is valued at approximately $2.4 billion, inclusive of $1.6 billion in cash and $800 million in net debt, which will be extinguished at the time of closing.
The deal structure reflects an enterprise value of 1.7 times the rate base as of December 2024. The proceeds from this sale are expected to support Eversource’s continued financial growth, including paying down debt and reinvesting capital into its primary electric and natural gas businesses.
The deal will also enhance the company’s financial position and allow for significant investments in infrastructure to improve reliability for its customers. However, due to the expected loss on the sale, Eversource is forecasting a loss of approximately $300 million in its fourth-quarter results for 2024. Included in this loss is an estimated income tax expense of around $140 million. Despite this, Eversource has reaffirmed its long-term earnings-per-share (EPS) growth target, which remains between 5% and 7% through 2028.
Joe Nolan, Chairman, President, and CEO of Eversource, expressed pride in the company’s growth since acquiring Aquarion in 2017. “Since our acquisition of Aquarion in 2017, we have built on its longstanding reputation for superior customer service, industry-leading reliability, and operational excellence. This partnership has helped Aquarion grow into the largest investor-owned water utility in New England and the seventh-largest in the country. We have worked together to ensure Aquarion’s water service is among the best in the region, and I extend my sincere thanks to the Aquarion leadership team and employees for their dedication to safety and exceptional service.”
Nolan also emphasized that this transaction is part of a broader strategy to focus on Eversource’s core utilities business. “This transaction strengthens our commitment to our electric and natural gas operations, which remain the largest regulated utility in New England. By optimizing our portfolio and strengthening our balance sheet, we can reinvest in infrastructure to better serve our customers,” Nolan added.
The transaction also represents an important milestone for the Aquarion Water Authority. RWA and AWA Interim President and CEO Sunder Lakshminarayanan noted the significance of the deal, highlighting the regional benefits of AWA’s governance.
This transaction allows us to advance our regional supply strategy and leverage the RWA’s 45-year track record of excellent stewardship and organizational stability for the benefit of Aquarion’s customers, employees, and communities. As a not-for-profit, quasi-public utility, we are committed to providing high-quality water services at an affordable price, while maintaining a safe and positive workplace for our employees,” Lakshminarayanan said.
Aquarion, headquartered in Bridgeport, Connecticut, serves around 250,000 water and wastewater customers across 72 cities and towns in Connecticut, Massachusetts, and New Hampshire. The company has grown significantly under Eversource’s ownership. Since 2017, Aquarion has added approximately 30,000 customers through six acquisitions, including the purchase of New England Service Company in 2021 and The Torrington Water Company in 2022. These acquisitions have contributed a combined $200 million to Aquarion’s rate base. In addition to these acquisitions, Aquarion has expanded its business into the wastewater sector, acquiring the municipal water and wastewater treatment systems of New Hartford in 2023 and the City of Ansonia’s wastewater system in 2024.
The completion of the transaction is subject to approval by various regulatory bodies, including the Connecticut Public Utilities Regulatory Authority, the Massachusetts Department of Public Utilities, and the New Hampshire Public Utilities Commission. The deal also requires approval under the Hart-Scott-Rodino Antitrust Improvements Act and will be finalized upon meeting customary closing conditions. The transaction is expected to close in late 2025.
To facilitate this deal, Eversource Energy has enlisted Citi and Morgan Stanley & Co. LLC as financial advisors, while Ropes & Gray LLP has provided legal counsel. AWA was advised by Barclays, with legal support from Cravath, Swaine & Moore LLP.
About Eversource Energy
Eversource Energy is a recognized leader in corporate citizenship, having been named the #1 U.S. utility on TIME’s List of World’s Best Companies for 2024. Operating across Connecticut, Massachusetts, and New Hampshire, the company serves approximately 4.4 million customers with electricity, natural gas, and water. As the nation’s leading energy efficiency provider, Eversource is deeply committed to clean energy initiatives. The company integrates innovative solutions like geothermal technology, offshore wind, solar energy, electric vehicles, and battery storage into the grid to create a sustainable future for its customers. Eversource is also dedicated to ensuring the reliability of its energy and water services with a customer-first approach.
The sale of Aquarion to AWA marks a new chapter for both companies. Eversource will continue to focus on its energy operations while leaving the legacy of growth and customer service at Aquarion in capable hands with the AWA. As this strategic shift unfolds, the company remains committed to its mission of delivering reliable, sustainable, and cost-effective solutions for its customers in New England, with a particular focus on energy reliability and environmental stewardship.
The transaction further reflects the ongoing transformation in the utility sector, where companies are increasingly focusing on their core businesses while aligning with regional and environmental goals. For customers and employees of Aquarion, this transition promises to bring a new era of stability and focus under the stewardship of the AWA. For Eversource, the sale supports a strategic alignment of its resources, enhancing its ability to invest in its infrastructure and continue its leadership in the electric and natural gas sectors.
