Global Water Resources (GWRS) Acquires Eagletail Water
Zacks Investment Research | May 24, 2017 10:19PM ET
Global Water Resources, Inc. (NASDAQ:GWRS) has concluded the acquisition of Phoenix, AZ-based Eagletail Water Company. With this buyout, the company initiated its acquisition driven expansion strategy and more such acquisitions are anticipated in coming days.
This acquisition will help the Eagletail water service area customers to enjoy the benefits of wastewater services as the area previously lacked wastewater service facility. As per the reformed water policy, the Arizona Corporation Commission (ACC) approved the deal on an accelerated basis.
Consolidation – Need of the Hour
Consolidation is the need of the hour in the fragmented U.S. water utility space. The water infrastructure in U.S. has aged and needs repair and overhaul. However, it becomes very difficult for the small utility operators like Eagletail Water Company, to carry out expensive repairs and maintenance work.
So it comes down to bigger players like Global Water Resources to make necessary investment to upgrade as well as maintain the water and wastewater systems. Consequently, consolidation would drive the necessary infrastructure overhauls for the industry at large.
Global Water Resources has taken initial steps to expand operation through acquisitions, but there are some other water utilities as well which are looking to expand operation through inorganic route.
American Water Works (NYSE:AWK) is expected to add nearly 33,000 customers in 2017 through acquisitions out of which 13,000 customers have already been added in the first quarter of 2017.
Aqua America Inc. (NYSE:WTR) successfully completed a few acquisitions in the first quarter of 2017. Its pending acquisition will add another 8,600 customers to its existing base after it is completed over the course of the year.
Stock Performance
In the last 12 months, Global Water has outperformed the Zacks categorized Zacks Investment Research
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