Essential Utilities Unit Buys Greenville Municipal Water for $18M

Essential Utilities, Inc. WTRG announced that its unit Aqua Pennsylvania has completed the acquisition of the Greenville Municipal Water Authority in Mercer County, PA, for $18 million. The acquisition will add over 2,900 new customers to the company in Greenville Borough, as well as Hempfield and West Salem Townships. 

The majority of the water and wastewater infrastructure is nearing the end of its effective service life and needs attention. The acquired Greenville Municipal Water Authority requires investment for upgrades. Essential Utilities’ unit plans to invest nearly $10 million in the acquired assets over the next decade to upgrade and provide high-quality service to customers.

Essential Utilities has been active in expanding its operation through an inorganic route and has completed seven water and wastewater acquisitions in the past 24 months, including the current one. These strategic acquisitions have added 9,655 customers to its existing operation.

Essential Utilities is working on a merger agreement with American Water Works AWK. The deal is expected to close in first-quarter 2027 and will create a utility company worth $40 billion.

Aging Water Infrastructure Needs Investment

U.S. water utilities operate nearly 2.2 million miles of pipelines, and a major portion of these pipelines has aged. As a consequence, frequent water main breaks are occurring, resulting in the wastage of priceless potable water each day and increasing utilities’ operating expenses. A huge investment is required to upgrade and maintain the aging water and wastewater infrastructure. The Environmental Protection Agency estimates that an investment of $1.25 trillion will be required over the next 20 years to maintain existing systems and expand water services.

Consolidation In Fragmented Water Space Can Ensure Funds

The U.S. water industry continues to be highly fragmented, with more than 50,000 community water systems and approximately 14,000 wastewater treatment systems. Many smaller utilities lack the financial capacity to modernize aging infrastructure, which contributes to inefficiencies and water loss. 

Consolidation through mergers and acquisitions plays an important role in improving service quality, lowering costs and supporting broader infrastructure investment. Small water and wastewater suppliers do not have the financial capacity to invest in costly repairs and upgrades. As a result, larger utilities with strong financial strength are increasingly acquiring smaller systems, and making required investments to promote modernization and extend their service footprint.

American Water Works continues to acquire smaller units to expand its operations and plans to invest between $19 billion and $20 billion over the 2026-2030 period to strengthen its operations.

Middlesex Water Company MSEX plans to invest $506 million during the 2026-2028 period in infrastructure projects to strengthen its operations. The company has expanded its operations in Delaware and the New Jersey region through strategic acquisitions.

California Water Service Group CWT continues acquiring smaller utilities to expand operations and plans to invest $760 million and $690 million in 2026 and 2027, respectively, for infrastructure development and to support long-term operational growth.

Price Movement of WTRG

In one month, the stock of the company has gained 7.4% compared with the industry’s 7.3% growth.  

Zacks Rank

WTRG currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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