Artesian to acquire Tidewater sewer utility for $6.4M
NEWARK – Artesian Wastewater Management Inc., a subsidiary of the publicly traded Artesian Resources Corp., announced Monday afternoon that it has reached a $6.4 million acquisition deal for Tidewater Environmental Services Inc. (TESI), a Delaware sewer utility. The acquisition will more than double the sewer customers for Artesian, the state’s largest water utility.
Founded in 2005, TESI is one of three utilities operated in Delaware that are owned by publicly traded, New Jersey-based Middlesex Water Company. It will continue to own and operate both regulated water utility Tidewater Utilities Inc. and non-regulated water and wastewater contract operations business, White Marsh Environmental Systems Inc.
Artesian and Middlesex have entered into a definitive agreement where Artesian will purchase all of the stock of TESI, which serves approximately 3,600 retail wastewater customers in Kent and Sussex counties. The transaction is subject to approval by the Delaware Public Service Commission and other customary closing conditions and is expected to be finalized before the end of this year.
Artesian began providing wastewater service to customers in 1998, designing and operating two wastewater treatment facilities for the town of Middletown. Artesian currently treats, processes, and disposes of over 1.3 billion gallons of wastewater annually from homes and businesses throughout the state at six different facilities, serving about 3,000 customers.
The acquisition of a competitor marks a departure from Artesian’s typical growth in recent years, where it has focused on extending its own service network and buying town-owned water and sewer services. It acquired Frankford’s and Delaware City’s water systems last year for a combined $5.7 million after buying municipal systems in Slaughter Beach Water Company, High Point, Cantwell, Odessa and Historic Fort DuPont over the last three years.
Meanwhile, Artesian has invested approximately $44 million over the past four years in water and wastewater infrastructure in Sussex County, an area that it has specifically targeted for growth. The southernmost county is experiencing rapid population and new housing growth spurred in part by retirees from neighboring states seeking out the coastal lifestyle and lower tax climate.
The sale also marks a refocus for Middlesex, which has the bulk of its 500,000 customers in its home state of New Jersey. Both companies “jointly concluded that this transaction is in the best long-term interest of the customers and the shareholders of their respective organizations,” according to the announcement.
Artesian’s stock was trading about 1% higher Tuesday following the acquisition announcement while Middlesex was trading about flat.