01—Abstract
Summary
Summary of the 8-K filed January 28, 2025. Cited figures are marked; the original filing is the authoritative source.
On January 27, 2025, Eversource Energy (NYSE: ES) entered into a Purchase and Sale Agreement to sell its wholly-owned subsidiary Aquarion Water Company to the newly created Aquarion Water Authority (AWA), a quasi-public Connecticut political subdivision affiliated with the South Central Connecticut Regional Water Authority (RWA).
The aggregate enterprise value is approximately $2.4 billiona, consisting of about $1.6 billion in cash and $800 million of net debt extinguished at closing, equal to roughly 1.7x rate base at December 2024. The transaction requires approvals from the Connecticut PURA, the Massachusetts DPU, the New Hampshire PUC, and Hart-Scott-Rodino clearance, with closing expected in late 2025 per the press release (the 8-K body says 2025). For investors, the key financial implication is that Eversource expects to record a loss on sale of approximately $300 million in Q4 2024, including roughly $140 million of estimated income tax expense.
The company frames the proceeds as a means to pay down parent company debt and redeploy capital into its core electric and natural gas businesses, which it says will support reliability investment and balance sheet strength. Management reaffirmed its long-term EPS growth target of 5%b to 7% through 2028, signaling that the divestiture is not intended to alter that outlook. The filing is a strategic portfolio-optimization move that exits a non-core water business acquired in 2017 and reinforces Eversource's focus on electric and gas utilities in New England.
Investors should monitor the timing and conditions of multi-state regulatory approvals, the final realized proceeds after closing adjustments, and how the proceeds are used to reduce leverage. The forward-looking statements caution that closing timing and conditions remain uncertain.
02—Key points
Key Highlights
- Agreement to sell Aquarion Water Company to Aquarion Water Authority for an aggregate enterprise value of approximately $2.4 billion, including ~$1.6 billion cash and ~$800 million net debt extinguished at closing
- Transaction implies about 1.7x rate base at December 2024, subject to closing adjustments
- Expected pre-tax-and-tax loss on sale of approximately $300 million in Q4 2024 results, including about $140 million of estimated income tax expense
- Proceeds are intended to pay down parent company debt and support reinvestment in core electric and natural gas businesses
- Eversource reaffirmed its long-term EPS growth target of 5% to 7% through 2028
- Closing requires approvals from CT PURA, MA DPU, NH PUC, and HSR clearance; expected to close in late 2025 per the press release
- Aquarion serves nearly 250,000 water and wastewater customers across CT, MA, and NH, and was acquired by Eversource in 2017
03—Questions
Frequently Asked Questions
Why is Eversource selling Aquarion?
Eversource says the sale allows it to optimize its portfolio, strengthen its balance sheet by paying down parent company debt, and reinvest capital in its core electric and natural gas businesses to improve reliability for customers.
Will this sale cause a financial loss for Eversource?
Yes. Eversource expects to record a loss on the planned sale of approximately $300 million in its fourth quarter 2024 results, which includes about $140 million of estimated income tax expense.
Does the sale change Eversource's earnings outlook?
Eversource reaffirmed its long-term EPS growth target of 5% to 7% through 2028, indicating management does not expect the divestiture to change that target.
What conditions must be met before the sale closes?
The transaction requires regulatory approval from the Connecticut Public Utilities Regulatory Authority, the Massachusetts Department of Public Utilities, and the New Hampshire Public Utilities Commission, plus clearance under the Hart-Scott-Rodino Act and other customary closing conditions.
Who is the buyer and when is closing expected?
The buyer is the Aquarion Water Authority, a newly created quasi-public Connecticut water authority alongside the South Central Connecticut Regional Water Authority. The press release expects closing in late 2025, while the 8-K body states only that closing is expected in 2025.
04—Continue