CLINTON: The CT Water Service [Nasdaq: CTWS] is merging with San Jose based SJW Group, [NYSE: SJW, San Jose Water Company].
SJW’s CEO and chairman Eric W. Thornburg will be the CEO and chairman of the combined company. Thornburg was CEO of CWS until last September when he resigned to become CEO of SJW. CWS had a market cap of approximately $660 million before the announcement and San Jose $1 billion.
Thornburg said of the merger, “This transformational merger of equals joins two leading and complementary water utility companies.”
The companies are calling their transaction a “merger of equals” and a $750 million deal,” the combined company will have approximately 1.5 million customers located in three states and will be the third largest publicly traded water company. Headquarters for the company will be in San Jose. CWS’s CEO will remain at the company as president of the Connecticut operations. CWS has 90,000 connections and serves 300,000 residents in 56 Connecticut towns. SJW serves 1 million residents in California and another 42,000 in Texas.
“Together, we create a new larger, stronger company capable of delivering greater value and benefits for our shareholders, customers, employees and communities than either company could deliver on its own,” said David Benoit, CEO and president of Connecticut Water.
While it is being billed as a merger of equals, SJW Group’s shareholders will own 60% of the company, it’s revenues are nearly four times that of CWS and its profits are more than double.
SJW Group earned $59.2 million on revenue of $389.2 million in 2017, CWS however was more profitable per revenue and earned $23.9 million on revenue of $103.8 million.
Some SWJ investors decided to get liquid after the announcement with SWJ shares dropping 4%, Connecticut Water’s shares were higher by 8%.