Missouri American Water to buy Neosho water systems for $34.5 million

ST. LOUIS - Missouri American Water, a subsidiary of American Water (NYSE:AWK), announced Wednesday it has signed an agreement to purchase the City of Neosho’s water and wastewater systems for $34.5 million. The utility giant, with a market capitalization of $27.56 billion, has demonstrated strong financial performance, maintaining dividend payments for 18 consecutive years. According to InvestingPro analysis, the company currently trades above its Fair Value, reflecting investor confidence in its expansion strategy.

The deal, which received unanimous approval from the Neosho City Council, has been submitted to the Missouri Public Service Commission (PSC) for regulatory review. The transaction would transfer ownership of water and wastewater assets serving approximately 5,400 customer connections.

As part of the agreement, Missouri American Water plans to invest approximately $35 million in system improvements during the first five years following acquisition completion. These upgrades will include facility improvements, replacement of water and wastewater mains, and technology integration focused on water conservation, leak detection, and wastewater treatment compliance.

"For more than 130 years, Missouri American Water has been a trusted utility serving communities across our state," said Missouri American Water President Rich Svindland in a press release statement.

Upon closing, Neosho customers will continue paying their existing water and wastewater rates, with future rate changes subject to PSC review and approval. Customers will gain access to the company’s online account management and billing information systems, as well as customer assistance programs.

The acquisition process includes a PSC review period expected to last 6 to 12 months, with the transaction anticipated to close in the second half of 2026.

Missouri American Water currently provides water and wastewater services to approximately 1.6 million people across Missouri. With an overall Financial Health score of FAIR from InvestingPro, which offers comprehensive analysis and additional insights through its Pro Research Reports covering 1,400+ US equities, the company maintains a strong position in the regulated utilities sector.

In other recent news, American Water Works reported its Q2 2025 earnings, revealing an earnings per share (EPS) of $1.48, which fell short of the forecasted $1.51. Despite this, the company exceeded revenue expectations by posting $1.28 billion against a forecast of $1.21 billion. This revenue beat highlights a positive development for the company. Additionally, American Water Works announced the pricing of an underwritten offering of over 7 million shares of common stock at $142.00 per share. Wells Fargo Securities, J.P. Morgan, and Mizuho are serving as joint book-running managers for this offering.

Moreover, California American Water, a subsidiary, completed its acquisition of the Bass Lake Water Company system, adding approximately 1,000 customers to its service area. This acquisition marks the eighth purchase by California American Water in the past five years, contributing to a total of over 13,000 new water and wastewater customers since 2020. These developments reflect ongoing strategic growth initiatives within the company.

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