Group planning to sell Missoula water system
MISSOULA (AP) — The Carlyle Group has agreed to sell the company that owns Missoula’s water supply and distribution system to Canada-based Algonquin Power and Utilities Corp. for $327 million, the companies said Friday.
The proposed deal, which must be approved by regulators, complicates the attempt by Missoula officials to take ownership of the city’s water system, Mountain Water Co. The city filed a condemnation action in April to force the Washington, D.C.,-based private equity firm to sell Mountain Water to it.
Under the new proposal, Algonquin Power’s Liberty Utilities will acquire Park Water Co. from Carlyle Infrastructure Partners, the firm’s infrastructure investing business.
Park Water owns Mountain Water and two water systems in Southern California, Apple Valley Ranchos Water and Park Central Basin, with nearly 74,000 customers between the three. The two California systems will be included in the sale.
Park Water employs 160 people and has an estimated $259 million in assets. The $327 million sale price includes Algonquin taking on $77 million of existing debt.
The deal is expected to close in 2015.
The Carlyle Group took over the Missoula water system when it bought California-based Park Water in 2011 for $102 million. Missoula officials said in court documents Carlyle had backed out of a verbal agreement in which the city would support the firm’s 2011 purchase in exchange for Carlyle selling Mountain Water to the city in 2013.
City officials argue theirs is the only major city in Montana that doesn’t own its own their water supply, and they want to change that.
Missoula is now trying to use eminent domain to force Carlyle to sell Mountain Water after the city’s purchase offers were rejected, including one for $50 million.
A trial has been set for March. If the condemnation is approved, three appointed commissioners would determine a fair price for Mountain Water.
Missoula officials and attorneys were meeting Friday to discuss the proposed sale to Algonquin and had no immediate comment, the Missoulian reported.
Algonquin’s utility business provides water, electricity and natural gas to 485,000 customers in North America, according to the company statement.
It has purchased seven U.S.-based utilities since 2010.