Birmingham Utilities Announces Sale of Company to South Central Connecticut Regional Water Authority and Connecticut Water Compa
June 29 2007 - 10:01AM
Business Wire
BIW Limited, the parent company of Birmingham Utilities and
Birmingham H2O Services, announced today that it has signed an
agreement to sell the company to the South Central Connecticut
Regional Water Authority (RWA) of New Haven, CT for $23.75 per
share, or approximately $40 million. RWA will acquire the 9,500
Birmingham Utilities customers in Ansonia, Derby, and Seymour. As
part of the transaction, Connecticut Water will pay $3.5 million
for the assets of Birmingham Utilities� Eastern Division, which has
2,200 customers in 15 towns. Betsy Henley-Cohn, Chairwoman of
Birmingham commented, �We believe this transaction is in the best
interests of our shareholders, ratepayers, and the communities we
serve.� She indicated, �Through this transaction, Birmingham
Utilities is able to ensure that our customers� needs will continue
to be met while our shareholders receive a fair return for their
investments in this water system.� �This is great news for Regional
Water and Birmingham customers,� said David Silverstone, president
and CEO of the South Central Connecticut Regional Water Authority
said. �As provision of water becomes more complex, the size and the
economy of scale indicate that this merger will maintain the
affordability of water. The region as a whole benefits from this
merger. We have a long-standing commitment to deliver high-quality
water, along with excellent customer service. We look forward to
meeting the long term water supply needs of the region.� The
innovative partnership between the RWA and Connecticut Water to
purchase Birmingham Utilities, allows the acquisition to proceed in
a way that is consistent with the RWA�s enabling legislation, which
limits its water utility acquisitions to the towns in its district.
The Ansonia operations are within the RWA district and the
remaining systems more closely fit in the Connecticut Water service
area. �BUI has done an excellent job of investing needed capital in
these systems and making substantial improvements in the
infrastructure and quality of service. We look forward to building
on this solid foundation,� said Eric W. Thornburg, Connecticut
Water president and CEO. He added the acquisition of BUI�s Eastern
Operations fits well with the company�s growth strategy. �We have
considerable experience in the acquisition, integration, and
operation of other water utilities, having acquired 26 water
systems since 1985. We will work tirelessly to serve these new
customers and the communities in which they live.� John S. Tomac,
Birmingham President noted, �All BUI customers will benefit from
being served by these larger utilities that have additional
resources and personnel to invest in future system improvements
over the long-term.� Tomac observed, �I am very pleased the company
is being sold to two Connecticut based organizations, both of which
have long-standing reputations of regulatory compliance and
excellence in customer service.� The acquisition is subject to
approval by the shareholders of BUI and regulatory approval of the
Authority�s Representative Policy Board, as well as the Connecticut
Department of Public Utility Control. This transaction is expected
to be completed in approximately six months. Editors note: About
the South Central CT Regional Water Authority: It is a non-profit
public corporation and political subdivision of the State of
Connecticut. In 1980, the Authority acquired the New Haven Water
Company, an investor owned water utility, which was founded in
1849. It owns more than 26,000 acres of land, provides a wide array
of recreational opportunities and provides water-related services.
Through its Whitney Water Center, the Authority provides hands-on
water science programs to some 16,000 students annually. About The
Connecticut Water Company: It provides water to more than 83,000
customers, or nearly 300,000 people, in 41 towns in Connecticut,
and is the largest subsidiary of Connecticut Water Service, Inc.
(NASDAQ GS: CTWS), New England�s largest locally based investor
owned water utility company. CTWS also provides water related
services to residential, commercial and industrial customers as
well as municipalities and other water utilities through its New
England Water Utility Services subsidiary. About Birmingham
Utilities, Inc.: BIW Limited is the parent company of Birmingham
Utilities and Birmingham H2O Services. Birmingham Utilities serves
a total of 11,500 customers, with 9,500 in their Ansonia Division
service towns of Ansonia, Derby and Seymour. They serve an
additional 2,200 customers in 32 water systems in their Eastern
Division in the towns of Ashford, Colchester, Columbia, Coventry,
East Haddam, East Hampton, Hebron, Lebanon, Manchester,
Marlborough, Moodus, Portland, Storrs, Willington and Woodstock.
BIW is traded on the American Stock Exchange (AMEX: BIW). Trading
of BIW stock was voluntarily suspended at the close of business on
Thursday, June 28th pending this announcement. This news release
may contain certain forward-looking statements regarding
Connecticut Water�s results of operations and financial position.
These forward-looking statements are based on current information
and expectations, and are subject to risks and uncertainties, which
could cause Connecticut Water�s actual results to differ materially
from expected results. The Connecticut Water Company, our regulated
water subsidiary, is subject to various federal and state
regulatory agencies concerning water quality and environmental
standards. Generally, the water industry is materially dependent on
the adequacy of approved rates to allow for a fair rate of return
on the investment in utility plant. The ability to maintain our
operating costs at the lowest possible level while providing good
quality water service is beneficial to customers and stockholders.
Profitability is also dependent on the timeliness and amount of
rate relief and numerous factors over which we have little or no
control, such as the quantity of rainfall and temperature,
industrial demand, financing costs, energy rates, tax rates, and
stock market trends which may affect the return earned on pension
assets, and compliance with environmental and water quality
regulations. The profitability of our other revenue sources is
subject to the amount of land we have available for sale and/or
donation, the demand for the land, the continuation of the current
state tax benefits relating to the donation of land for open space
purposes, regulatory approval of land dispositions, the demand for
telecommunications antenna site leases and the successful
extensions and expansion of our service contracts. We undertake no
obligation to update or revise forward-looking statements, whether
as a result of new information, future events, or otherwise.
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