Cal Water to acquire two local water companies

SAN JOSE, Calif. - California Water Service (Cal Water), the principal subsidiary of California Water Service Group (NYSE: CWT), a utility company with a market capitalization of $2.79 billion, has entered into agreements to purchase the water utility assets of Casa Loma Water Company and Palm Mutual Water Company. According to InvestingPro data, CWT has maintained dividend payments for 55 consecutive years, demonstrating strong financial stability. The acquisitions, pending regulatory approval, are part of Cal Water’s expansion within its existing service areas, aiming to provide enhanced water services and infrastructure upgrades.

Casa Loma, located near Cal Water’s Bakersfield Operations Center, serves approximately 900 individuals through 237 residential and 11 commercial connections. Cal Water, which already has an intertie with Casa Loma, plans to deliver water to these customers immediately after the acquisition’s completion. The company also intends to install additional interconnections and make infrastructure improvements to enhance fire flow and system pressure.

Palm Mutual, situated close to Cal Water’s Northeast Bakersfield Treatment Plant, provides water to 63 residential customers. Since Palm Mutual lacks its own water supply sources, Cal Water has been serving the company through a master meter interconnection. Cal Water anticipates making gradual infrastructure upgrades to ensure consistent and high-quality service.

Both acquisitions are contingent upon satisfying closing conditions and receiving approval from the California Public Utilities Commission (CPUC). Cal Water plans to file a Tier 2 Advice Letter with the CPUC to adopt existing Cal Water rates for the newly acquired customers.

Martin A. Kropelnicki, Cal Water Chairman and CEO, expressed confidence in the acquisitions, highlighting the commitment to the health and safety of the customers and the promise to provide high service levels.

Cal Water serves over 2.1 million people in California through 499,400 service connections and is recognized for its sustainable practices and community engagement. The company has received accolades for its responsible operations and workplace environment. With a gross profit margin of 54.4% and stable revenue growth, InvestingPro analysis indicates the company maintains a Fair financial health score, suggesting solid operational performance.

The forward-looking statements included in the press release reflect the company’s expectations for the acquisitions’ potential benefits, subject to risks, uncertainties, and assumptions that could lead to varying actual results. These statements are based on current information and are not guaranteed future performance. Based on InvestingPro’s Fair Value analysis, the stock appears to be slightly overvalued at current levels. Investors can access comprehensive analysis, including 12+ additional ProTips and detailed valuation metrics, through InvestingPro’s extensive research reports, available for over 1,400 US stocks.

This article is based on a press release statement from California Water Service Group.

In other recent news, California Water Service Group reported its first-quarter earnings for 2025, exceeding analysts’ expectations with an earnings per share (EPS) of $0.22, surpassing the forecasted $0.16. The company generated $203.97 million in revenue, which was slightly below the anticipated $207.6 million. Despite the revenue miss, the company showed resilience with significant EPS growth. In addition to the earnings news, California Water Service Group announced a $350 million equity distribution agreement with several financial institutions. This agreement allows the sale of its common stock through an at-the-market equity program, with proceeds intended for general corporate purposes. The equity program involves prominent firms such as Robert W. Baird & Co., BofA Securities, and Morgan Stanley. Furthermore, the company is focused on managing expenses and monitoring tariff impacts as part of its ongoing 2024 California General Rate Case process. The company remains committed to continued capital investments, particularly in infrastructure, with a projected compound annual growth rate of 11.7% for its rate base.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.