Birmingham
Utilities Announces Sale of Company to South Central Connecticut
Regional Water Authority and The Connecticut Water Company
RWA to acquire Ansonia Division, CWC to acquire Eastern
Operations
ANSONIA, CONNECTICUT
– June 29, 2007 – 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.
