American Water’s subsidiary acquires City of Farmington water system


American Water Works Company Inc. (AWK) has announced that its subsidiary – Illinois American Water – has completed the acquisition of the City of Farmington’s water system for $3.75 million. The acquisition has resulted in the addition of 1,125 new water customers to the company’s existing customer base.

Illinois American Water (IMW) plans to invest $5 million over the next five years to improve the existing water infrastructure of the City of Farmington.

Furthermore, IMW intends to make improvements such as overall customer service, replacing water mains, installation of water loop mains, meter replacement and improving water pressure.

M & A’s facilitating infrastructure upgrades

Significant investment is required to upgrade aging water and wastewater infrastructure.
Bigger players are well positioned to support the infrastructure overhaul, especially if resources are merged.

Last month, Illinois American Water completed the acquisition of the Village of Fisher for $6.8 million, adding around 850 water and wastewater customers to the company’s existing customer base.

American Water Works Company has increased operations within the USA through acquisitions of water and wastewater service providers. The company added 42,000 customers to its customer base in 2016, and 39,514 customers in 2017 through acquisitions.

American Water Works plans to invest $8.0-$8.6 billion from 2018 through 2022, which will boost earnings by 7-10% per annum during the period from 2015. A major chunk of $7.2 billion will be directed to strengthen its regulated businesses.

Another water utility, Aqua America Inc. invested $478 million in 2017 and aims to increase 2018 capital investment to exceed $500 million.