PHOENIX — A subsidiary of Epcor Utilities Inc. is expanding its presence in the U.S. Southwest with a US$470 million deal to acquire two subsidiaries of American Water Works Company Inc.
Arizona American Water is a regulated utility that provides water service to 106,000 water customers and wastewater services to 51,000 customers. They live in 13 communities, primarily in the Phoenix area.
The other subsidiary, New Mexico American Water, provides services to 17,000 customers in Clovis, in eastern New Mexico, and in the Edgewood area near Albuquerque, N.M.
Arizona American Water employs 200 people, while New Mexico American Water has 25 staff. It is anticipated they will continue to operate the utilities for Epcor.
“This investment is consistent with Epcor’s strategy of redeploying funds from the sale of our investment in Capital Power Corp. into quality rate-regulated businesses,” said Don Lowry, Epcor’s president and CEO.
“When complete, the transaction will provide Epcor USA with a strong hub in the U.S. Southwest.”
Capital Power was spun out last May from Epcor Utilities Inc., the City of Edmonton’s local energy distributor.
Epcor announced in December that it was selling about $200 million shares of Capital Power Corp. (TSX:CPX), a publicly traded electricity producer it controls.
Earlier last year, Epcor bought Chaparral City Water Co. — another Phoenix-area utility — for US$35 million in cash. It has 13,000 customers mainly in the town of Fountain Hills, Ariz., as well as a small portion in Scottsdale, Ariz.