Artesian to buy Clayton water system for $5M

Headquartered in Newark, Artesian continues to buy small municipal water infrastructure.| PHOTO COURTESY OF ARTESIAN RESOURCES

NEWARK – Artesian Water Company Inc. announced last week it has reached a deal to acquire the water system of the Kent County town of Clayton.

Clayton, 2 miles west of Smyrna and Route 1, struck a deal with Artesian on Feb. 16 to sell its  23 miles of water main, three wells and two elevated water storage tanks. The water system serves about 1,500 customers. 

Closing of the sale is anticipated in the second quarter of 2022, pending approval from the Delaware Public Service Commission. Artesian offered $5 million, according to town documents dated October 2021.

This is not a new relationship, as Artesian, subsidiary of the publicly traded Artesian Resources Corp., had worked with Clayton officials for the past 15 years, assisting them with their water supply and fire protection. 

Clayton officials solicited requests for proposals to operate or sell its water system last October, and Artesian was one of two bidders. Middlesex Water Company, and its subsidiary Tidewater Utilities, was the unsuccessful bid.

“As the provision of water has become more costly and complicated, it was a natural fit that Artesian and Clayton become one system,” Artesian Water Company President Nicholle Taylor said in a prepared statement.

“It is Artesian’s long-standing relationships with other water utility providers and proven ability to deliver superior water service to customers that foster our efforts to build and expand integrated water systems throughout the state of Delaware,” Artesian Chair and CEO Dian C. Taylor added. “We are proud that Clayton chose Artesian to provide water service to its citizens.”

The acquisition signals a return to form for Artesian, as it focuses on expanding its own service network and buying town-owned water and sewer services. It acquired Frankford’s and Delaware City’s water systems in 2020 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 four years.

Artesian’s largest connected regional water system consists of approximately 141 square miles and 77,200 metered customers, is located in northern New Castle County and portions of southern New Castle County.

In August 2021, Artesian Wastewater Management Inc. struck a $6.4 million acquisition deal for Tidewater Environmental Services Inc., doubling its sewer customers.

Once the deal is done, Clayton will have access to Artesian’s operations staff, which includes licensed operators, maintenance personnel, and a 24-hour per day dispatch center, which uses all in-house crews.

At the end of 2020, Artesian’s revenues totaled $88.1 million, or 5% more than the previous year.