Artesian closes $6.4M Tidewater sewer acquisition
NEWARK – Artesian Wastewater Management Inc., a subsidiary of the publicly traded Artesian Resources Corp., announced Friday afternoon that it closed its $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.
“This transaction is in the best long-term interest of the TESI customers and our shareholders. Artesian is committed to serving its new and existing customers with integrity and reliability and in a manner that respects the environment and preserves the water cycle,” said Dian C. Taylor, chair and CEO of Artesian, in a statement.
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 entered into an August definitive agreement where Artesian purchased all of the stock of TESI, which serves approximately 3,600 retail wastewater customers in Kent and Sussex counties. It also took ownership of seven wastewater facilities and 13,000 acres of exclusive franchise territory in Sussex County.
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.
“Our acquisition of TESI will allow Artesian Wastewater Management to obtain further operational synergies and regionalization of systems providing wastewater service in Sussex County. That includes further optimization of our Sussex Regional Recharge Facility near Milton, which is well-equipped to serve local businesses and rapidly growing communities in the area. I am confident that our operations will play a critical role in creating lasting solutions for wastewater management in an environmentally responsible way,” said David Spacht, president of Artesian Wastewater Management, in a statement.
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 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.
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 August announcement.
Artesian’s stock was trading about 1% higher Friday following the closing announcement just before the market’s close, while Middlesex’s share price was down about 2.5%. The market was closed Monday for Martin Luther King Jr. Day.