OREANDA-NEWS. The Heritage Village Water Company and Connecticut Water Service, Inc. (“Connecticut Water” or “CTWS”) today announced that the parties have reached an agreement for Heritage Village Water Company to join Connecticut Water.  Connecticut Water is a parent holding company based in Clinton, Connecticut which conducts its regulated water operations in Connecticut and Maine through its operating subsidiaries, Connecticut Water Company and Maine Water Company.  Connecticut Water’s unregulated water service provider, New England Water Utility Services, Inc., has been the contract operator of Heritage Village Water Company’s water and wastewater operations and has been providing support services for more than a decade.

According to Keith Sorensen, President of Heritage Village Water Company, Connecticut Water is a great strategic fit for Heritage Village Water Company’s customers, employees and communities. He stated, “As part of Connecticut Water, our customers will continue to be served by the same Heritage Village Water Company employees and our office and existing facilities will be retained. In addition, our customers will be served by a regulated utility whose only business is water and wastewater utility and related services. Further, Connecticut Water has a strong track record of providing high-quality service and investing in infrastructure to deliver high-quality water and reliable service, and a strong record of being a good steward of the environment.”

Eric W. Thornburg, President and CEO of Connecticut Water stated, “We are eager to have Heritage Village Water Company join with Connecticut Water. It is located near and has an existing interconnection with our water utility operations in the Naugatuck Valley. Heritage Village Water Company is a well-run utility that has received prudent infrastructure investment over the years. Customers will benefit by being part of larger, regional company, which has a size and presence that provides for operational efficiencies, purchasing power and other economies of scale. Customers of both companies will benefit when such savings can be realized.”

Heritage Village Water Company serves about 4,700 water customers in the communities of Southbury, Middlebury and Oxford, Connecticut, and 3,000 wastewater customers in the town of Southbury. The Heritage Village Water Company’s wastewater system is the only private wastewater utility in Connecticut and is regulated by Connecticut’s Public Utilities Regulatory Authority (“PURA”).  The current office of Heritage Village Water Company will be maintained in its current location for at least one year and all employees of the company will be invited to join the Connecticut Water team in their current positions.

Under the agreement, the acquisition will be executed through a stock-for-stock merger transaction valued at approximately $15.8 million.  Holders of Heritage Village Water Company common stock will receive shares of CTWS common stock in a tax-free exchange.  The transaction reflects a total enterprise value of approximately $20.6 million, including the assumption by Connecticut Water of approximately $4.8 million in debt of Heritage Village Water Company.

The completion of the transaction will require an approval vote by the shareholders of Heritage Village Water Company, approval by PURA in Connecticut and satisfaction of several other conditions.  The parties plan to file an application with PURA in the second quarter of 2016 with an anticipated closing by the end of 2016.  Upon receipt of regulatory approval and the closing of the merger transaction, the company will maintain its current name, Heritage Village Water Company, and will become a sister company to Connecticut Water and Maine Water.   The merger will not affect the rates or service for any of those water company customers.

When this transaction is completed, Connecticut Water will serve more than 127,000 water customers, or nearly 440,000 people in 79 communities across Connecticut and Maine, and more than 3,000 wastewater customers in Southbury, Connecticut.

Connecticut Water Service, Inc. (NASDAQ: CTWS) is one of the ten largest shareholder-owned water utilities in the country with a market capitalization of more than $525 million. Its stock trades on the NASDAQ Global Select Market under the ticker symbol CTWS.