South West Water owner announces £89m acquisition
Utility firm Pennon has acquired the holding company of a Surrey water company in a £89m deal.
The owner of Bristol Water and South West Water has acquired 100% of the issued capital of Sumisho Osaka Gas Water UK, the holding company of Sutton and East Surrey Water from Sumitomo Corporation and Osaka Gas.
Exeter based Pennon is also announcing its intention to issue new shares to raise up to £180m to help fund the deal.
SES Water and other ancillary businesses has over 750,000 customers and a forecast shadow Regulatory Capital Value of £351m.
Chief executive Susan Davy said: “SES Water is a fantastic fit for Pennon as we further expand our presence in water supply across Southern England, building on our successful similar acquisitions of Bournemouth Water and Bristol Water alongside the adoption of water supply in the Isles of Scilly.
“The business is a proven, high-quality water operation. We are particularly impressed by the innovation and technology-led solutions implemented by SES Water.
“As part of the Pennon Group, we will enhance SES Water’s financial resilience and better position the business to serve its customers and all stakeholders, as has proven to be the case with our acquisitions of Bournemouth Water and Bristol Water.”
She added: “We are able to invest in SES Water’s resources infrastructure, environment and people thanks to our strong financial performance and long-term UK shareholder base, delivering a seamless transition for SES Water’s customers while also providing a more robust and reliable service in the medium term.
“We expect SES customers to benefit from Pennon’s stewardship of the business, including being able to offer them the opportunity to participate in our unique WaterShare scheme and participate in the ownership of their local water provider.”
Pennon was fined £2.15m in April last year for illegally dumping sewage into rivers and the sea in Devon and Cornwall, following an investigation by the Environment Agency.
And the firm announced last year it plans to invest another £100m more than previously expected over the next two years as it tries to get to grips with the pollution problems.
Pennon said it anticipates that capital expenditure will total more than £850 million in the financial years ending in 2024 and 2025.
