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Highlights:
- Eversource sells Aquarion Water Company for $2.4 billion, 1.7X rate base.
- Proceeds to reduce debt and support core electric and natural gas operations.
- Long-term EPS growth target of 5-7% reaffirmed through 2028.
Eversource Energy (NYSE:ES) has unveiled the sale of its subsidiary, Aquarion Water Company, to the Aquarion Water Authority (AWA) for a total enterprise value of approximately $2.4 billion. The deal is structured with $1.6 billion in cash and $800 million in net debt. The transaction represents 1.7 times Aquarion’s rate base as of December 2024, marking a significant move in Eversource’s strategic focus on its core electric and natural gas operations.
This sale provides Eversource with the opportunity to reduce its parent company debt and reinvest in its core infrastructure. However, the company anticipates incurring a loss of $300 million in Q4 2024, including approximately $140 million in tax expenses related to the transaction. Despite the immediate financial impact, Eversource is maintaining its long-term growth forecast, reaffirming its commitment to an annual earnings per share (EPS) growth target of 5-7% through 2028.
Aquarion, which serves nearly 250,000 customers across Connecticut, Massachusetts, and New Hampshire, employs over 360 people and serves more than 775,000 people. The sale is expected to close in late 2025, pending the necessary regulatory approvals.
While the transaction positions Eversource to reduce debt and refocus its operations, the sale represents a notable shift in its business model as it moves away from water and wastewater services. Despite the short-term financial challenges, the company is confident in its ability to grow its core electric and natural gas businesses in the coming years.
