8-KRegulation FDOther EventsExhibits & Filings

American Water Works Company, Inc. 8-K Report, Regulation FD Disclosure (Sep 9, 2016)

Filed September 9, 2016For Securities:AWK

Summary

American Water Works Company, Inc. (AWK), through its wholly owned subsidiary Pennsylvania-American Water Company, announced a significant acquisition on September 9, 2016. The company has entered into an Asset Purchase Agreement to acquire substantially all of the wastewater assets of The Municipal Authority of the City of McKeesport for approximately $156.0 million. This strategic move is expected to expand Pennsylvania-American Water's service territory and customer base by approximately 22,000 customers across multiple municipalities. The acquisition is subject to customary closing conditions, including necessary regulatory approvals from the Pennsylvania Public Utility Commission and environmental approvals from federal and state agencies. The company anticipates closing the transaction in the second half of 2017, with a termination date of December 31, 2017, which may be extended under certain conditions. This acquisition represents a growth opportunity for AWK by adding regulated wastewater operations.

Key Highlights

  • 1Pennsylvania-American Water Company, a subsidiary of AWK, has agreed to acquire wastewater assets from The Municipal Authority of the City of McKeesport.
  • 2The total purchase price is approximately $156.0 million, subject to certain adjustments.
  • 3The acquired assets serve approximately 22,000 customers in McKeesport and surrounding communities.
  • 4The transaction is targeted for closing in the second half of 2017, with a potential termination date of December 31, 2017.
  • 5Closing is contingent upon obtaining key regulatory approvals, including from the Pennsylvania Public Utility Commission.
  • 6The agreement includes provisions for extending the termination date under specific circumstances, such as the need for additional time to secure governmental approvals.
  • 7This acquisition represents a strategic expansion into regulated wastewater services for the company.

Frequently Asked Questions

This 8-K filing announces a material agreement by American Water Works Company, Inc. (AWK), through its subsidiary Pennsylvania-American Water Company, to acquire wastewater assets from The Municipal Authority of the City of McKeesport. It details the terms of the agreement, the expected closing timeline, and the conditions that must be met for the transaction to be completed.

The acquisition involves a purchase price of approximately $156.0 million. While specific financial projections are not detailed in this filing, the acquisition is expected to add a new regulated wastewater service operation, expanding AWK's revenue base and customer count by approximately 22,000.

The main risks include obtaining necessary regulatory and environmental approvals, satisfying other customary closing conditions, potential delays, and unexpected costs or liabilities related to the transaction or integration. The company also notes risks related to municipal actions and its ability to finance the acquisition.

Pennsylvania-American Water Company aims to close the transaction in the second half of 2017. However, the agreement has a termination date of December 31, 2017, which can be extended by Pennsylvania-American Water under certain conditions, such as the need for additional time to obtain governmental approvals.