Eversource Energy, a prominent utility company in New England, has announced plans to divest its water supply subsidiary, Aquarion Water Company, in a transaction valued at $2.4 billion. The deal comprises $1.6 billion in cash and the assumption of $800 million in Aquarion’s net debt. This strategic move aims to refocus Eversource’s efforts on its core electric and natural gas operations.
Eversource Energy
Headquartered in Hartford, Connecticut, Eversource Energy serves approximately 3.7 million electric and natural gas customers across Connecticut, Massachusetts, and New Hampshire. The company has a longstanding commitment to environmental sustainability, having reduced net emissions by 30% since 2018 and setting an ambitious goal of achieving net-zero emissions by 2030. Financially, Eversource has demonstrated stability, with an A- investment grade rating from S&P Global and a history of 24 consecutive years of dividend increases, reflecting its robust financial health.
Aquarion Water Company
Acquired by Eversource in 2017 for $1.675 billion, Aquarion Water Company is the largest investor-owned water utility in New England. Based in Bridgeport, Connecticut, Aquarion provides water and wastewater services to nearly 250,000 customers across 72 cities and towns in Connecticut, Massachusetts, and New Hampshire. The company has earned high customer satisfaction ratings and is recognized for its commitment to environmental stewardship and sustainable practices.
The Transaction
The buyer in this transaction is a newly established quasi-public water authority that will operate alongside the South Central Connecticut Regional Water Authority. The sale proceeds will enable Eversource to reduce parent company debt and reinvest capital into its primary electric and natural gas businesses. Eversource anticipates recording a loss of approximately $300 million related to this sale in its fourth-quarter 2024 financial results, which includes an estimated $140 million in income tax expenses.
This divestiture underscores Eversource’s strategic focus on its core operations, aiming to optimize its portfolio and strengthen its balance sheet. The transaction is subject to regulatory approvals from utility regulators in Connecticut, Massachusetts, and New Hampshire, with an expected closing date in late 2025.
In summary, Eversource’s decision to sell Aquarion aligns with its strategy to concentrate on its primary utility services, while the acquisition by the new water authority is poised to enhance regional water service management.