American Water Works Company, Inc. (NYSE: AWK), the largest publicly traded U.S. water and wastewater utility company, today announced that it has agreed to acquire Pivotal Home Solutions from Southern Company Gas, a subsidiary of Southern Company, for approximately $365 million in cash, including estimated working capital.
Acquired through its American Water Enterprises (AWE) subsidiary and highly complementary to AWE’s Homeowner Services Group (HOS), Pivotal Home Solutions is a home warranty business operating in 18 states with about 1.2 million customer contracts. Pivotal Home Solutions offers coverage for a wide variety of home appliances, heating and cooling systems, and lines in and around a home.
“The employees of Pivotal Home Solutions, like those in American Water’s HOS group, are focused on providing outstanding customer service, as evidenced by both of our organizations achieving the Better Business Bureau’s highest rating.” said Susan Story, president and CEO of American Water. “Additionally, this is an opportunistic transaction forAmerican Water as it provides a strong platform for long-term and capital-light organic growth.”
Deborah Degillio, president of American Water Enterprises, added, “This acquisition delivers on one of our growth strategies to expand our complementary businesses. Coupled with our existing Homeowner Services portfolio, this acquisition will enhance our ability to provide additional home warranty solutions across the U.S., nearly doubling our customer contracts. We look forward to leveraging the expertise of the talented team of Pivotal Home Solutions employees who have built this successful organization.
“This acquisition also creates a tremendous opportunity from a product line perspective and for cross-selling our core water and wastewater products,” added Degillio.
The closing of the acquisition is subject to certain conditions, including obtaining necessary regulatory approvals and consents, the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, and other customary closing conditions and deliveries. Upon completion of the acquisition, Pivotal Home Solutions will be part of American Water’s home warranty businesses, while maintaining its current name and main operations in Naperville, Ill.
American Water anticipates closing the transaction by second quarter 2018.
American Water’s Homeowners Services Group operates in 43 states and Washington, D.C., and currently services more than 1.8 million contracts. The Homeowner Services Group has been providing protection programs for more than 15 years, has an A+ Rating from the Better Business Bureau and holds a 97 percent customer satisfaction rating. It also provides its Protection Programs to homeowners through municipal partnerships with the New York City Department of Environmental Protection, Orlando Utilities Commission, Nashville Metro Water Services and others.