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American Water Works Company, Inc. 8-K Report, Material Agreement (May 19, 2025)

Filed May 19, 2025For Securities:AWK

Summary

American Water Works Company, Inc. (AWK) announced on May 19, 2025, that it has entered into a definitive agreement to acquire Nexus Regulated Utilities, LLC's equity interests in entities that own regulated water and wastewater system assets across eight states. This strategic acquisition for approximately $315 million in cash (subject to adjustments) is expected to add nearly 47,000 customer connections to AWK's regulated businesses. The states included in the acquisition are Illinois, Indiana, Kentucky, Maryland, New Jersey, Pennsylvania, Tennessee, and Virginia, significantly expanding AWK's geographic footprint and customer base in these key regions. The transaction is structured as a cash-free, debt-free acquisition and is anticipated to close by August 2026, contingent upon customary closing conditions, including significant regulatory approvals from various public utility commissions and the expiration of the Hart-Scott-Rodino waiting period. The company intends to fund the acquisition through existing cash flow and liquidity sources. This move represents a substantial growth initiative for American Water, aligning with its strategy to expand its regulated operations and enhance its service area.

Key Highlights

  • 1AWK to acquire regulated water and wastewater assets from Nexus Regulated Utilities, LLC for approximately $315 million.
  • 2Acquisition adds nearly 47,000 customer connections across eight states: IL, IN, KY, MD, NJ, PA, TN, and VA.
  • 3Transaction is structured as a cash-free, debt-free equity purchase.
  • 4Estimated rate base at closing is approximately $200 million.
  • 5Closing is anticipated by August 2026, subject to regulatory approvals and other customary conditions.
  • 6Purchase price to be funded through company's operational cash flow and existing liquidity.
  • 7Agreement includes customary representations, warranties, and covenants, with provisions for termination and a potential termination fee of $15.75 million under specific circumstances.

Frequently Asked Questions

AWK is acquiring the equity interests in several entities that own regulated water and wastewater system assets located in Illinois, Indiana, Kentucky, Maryland, New Jersey, Pennsylvania, Tennessee, and Virginia from Nexus Regulated Utilities, LLC.

The aggregate purchase price is approximately $315 million in cash, subject to adjustments at closing. AWK intends to fund this acquisition through its cash flow from operations and its existing sources of liquidity.

The closing is subject to several conditions, including receipt of required regulatory approvals from applicable public utility commissions, the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, and the absence of any legal impediments. Customary representations, warranties, and covenants must also be met.

AWK currently anticipates that the closing will occur by or before August 2026.