Pennsylvania American Water to acquire two utility authorities for $36 million

MECHANICSBURG, Pa. - Pennsylvania American Water announced Tuesday it has signed agreements to acquire the Indian Creek Valley Water Authority and the Sutersville-Sewickley Municipal Sewage Authority for a combined $36.05 million, adding approximately 2,700 water and 500 wastewater connections to its customer base. The move comes as parent company American Water (NYSE:AWK), currently valued at $27.8 billion, continues its expansion strategy. According to InvestingPro data, AWK has maintained consistent dividend payments for 18 consecutive years, demonstrating strong financial stability in the utilities sector.

The larger acquisition involves the Fayette County-based Indian Creek Valley Water Authority for $32.8 million. This system includes approximately 140 miles of distribution mains, five booster pumping stations, and 11 finished water storage tanks. The water system is supported by two springs, one well, and a surface water treatment plant with a combined capacity of nearly 1 million gallons per day.

Pennsylvania American Water plans to invest approximately $8.9 million in improvements to the Indian Creek Valley system following the acquisition.

The company will also acquire the Sutersville-Sewickley Municipal Sewage Authority in Westmoreland County for $3.25 million. This wastewater system features approximately 12 miles of collection mains and three pumping stations. Pennsylvania American Water intends to invest an estimated $800,000 in improvements to enhance service reliability and environmental compliance for this system.

"With a strong presence in nearby communities, we’re in a great position to bring additional value through regionalization," said Justin Ladner, president of Pennsylvania American Water, in a press release statement.

Both acquisitions require approval from the Pennsylvania Public Utility Commission, which regulates the company’s rates and reviews any future rate changes. Pennsylvania American Water expects the transactions to close by the third quarter of 2026.

Pennsylvania American Water, a subsidiary of American Water (NYSE:AWK), currently serves approximately 2.4 million people across Pennsylvania. The company has shown robust financial performance, with revenue growing at nearly 12% over the last twelve months to $4.8 billion. InvestingPro analysis reveals additional insights about AWK’s financial health and growth prospects, with over 30 exclusive metrics and tips available to subscribers. The company’s comprehensive Pro Research Report, part of InvestingPro’s coverage of 1,400+ US equities, provides detailed analysis of its market position and growth strategy.

In other recent news, American Water Works Company reported its first-quarter 2025 earnings, revealing a revenue of $1.14 billion, surpassing the forecasted $1.12 billion. However, the company’s earnings per share (EPS) came in at $1.05, slightly below the anticipated $1.09. The revenue beat was attributed to strategic rate increases and acquisitions, although increased operating costs impacted EPS. In addition, American Water announced plans to acquire Nexus Utilities’ assets for $315 million, expanding its customer base by nearly 47,000 connections across eight states. The company also signed an agreement to acquire the City of Pittston’s wastewater system for $26.4 million, with plans to invest $5.1 million in system upgrades over the next five years. In governance news, Raffiq Nathoo has joined American Water’s board of directors, bringing extensive experience in the financial sector. Argus analysts maintained a Buy rating on American Water’s stock, citing consistent revenue and earnings growth driven by acquisitions and infrastructure surcharges. These recent developments reflect American Water’s ongoing strategy of expansion and strengthening its service offerings.

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