Essential Utilities Inc. has successfully completed the acquisition of Peoples, a Pittsburgh-based natural gas distribution company, in an all-cash transaction that reflects an enterprise value of $4.275 billion, including the assumption of approximately $1.1 billion of debt. The acquisition marks the creation of a new infrastructure company, which should have a significant impact on improving infrastructure reliability, quality of life and economic prosperity in the areas it serves.
As previously disclosed, the transaction was financed through a mix of equity and debt. Essential changed its name from Aqua America on Feb. 3.
In connection with the completion of Essential’s acquisition of Peoples, Essential also closed a $750 million investment from the Canada Pension Plan Investment Board. CPP Investments acquired approximately 21.7 million shares of Essential’s common stock through the transaction.
As part of the regulatory approval for the Peoples transaction, Essential committed to $23 million in rate credits for customers. Pennsylvania customers of both Aqua Pennsylvania and Peoples will receive a one-time rate credit on their bill in 2020. There will be no other impact to customer bills at either utility as a result of the transaction.
Essential has committed to no job loss at its utilities as a result of the combination. Its officials are already in discussion to add employees, both internally and through contractors, as gas main replacement is accelerated in the Pittsburgh region. The combined company plans to replace nearly 3,000 miles of aged natural gas mains over approximately 15 years.