Water and wastewater utility firm American Water Works Company has sold its regulated operations in the US states of Arizona and New Mexico to Epcor Water USA.
As part of the $470m deal, which was signed on 24 January 2011, Epcor has acquired all of the issued and outstanding stock of Arizona American Water Company and New Mexico American Water Company, which are the subsidiaries of the utility.
Through the acquisition, Epcor becomes the owner of regulated utilities providing water services to around 106,000 metered customers and wastewater services to 51,000 customers in more than 10 Arizona municipalities, including in Maricopa, Mohave and Santa Cruz counties.
Epcor's utilities will also provide water and wastewater services in the city of Clovis, as well as the Edgewood area near Albuquerque, New Mexico serving around 17,000 customers.
The pre-tax gain on the sale, prior to allocation of a portion of the goodwill from the parent company, is about $50m. After allocation of the goodwill, the pre-tax gain and its impact on American Water's income is expected to be minimal.
The completion of the transaction follows regulatory approval in Arizona and New Mexico, both of which were received in late 2011.
American Water CEO Jeff Sterba said: "This transaction allows American Water to continue to focus on areas where we can best serve customers and meet our objectives, and it allows our employees in Arizona and New Mexico new opportunities with Epcor."
Epcor Water USA president Joe Gysel said: "This important acquisition establishes Epcor as a premier provider of safe and reliable water services in Arizona and New Mexico, and builds off our 2011 acquisition of Chaparral City Water Company in Fountain Hills, Arizona."
Under the agreement, American Water's 220 employees based in Arizona and New Mexico will be transferred to Epcor.
Epcor Water USA is an indirect wholly-owned subsidiary of Canada-based Epcor Utilities.
