Duluth-based energy services provider Allete Inc. announced today that it has entered into a stock purchase agreement for the sale of U.S. Water Services, Inc. to Kurita Water Industries Ltd. for $270 million (exact amount subject to change at closing). The sale will take place at the end of the first quarter of this year upon regulatory approval.
Based in St. Michael, U.S. Water services is an integrated water solutions company aiming to optimize system performance, reduce water and energy use, and improve efficiency for its nearly 5,000 customers. Kurita Water Industries, in Tokyo, Japan, is a leader in international water management.
“This sale exemplifies our disciplined approach to providing shareholder value while executing on our multi-faceted strategy,” said Allete CFO Bob Adams, in a statement referring to Allete’s long-term diversification strategy, which includes expanding investments in clean energy opportunities.
"Our go-forward business mix provides attractive opportunities to meet and potentially exceed our stated average annual earnings growth target of five to seven percent while supporting our strong credit ratings.”
Adams adds that proceeds from the sale will primarily be reinvested in growth initiatives at both Regulated Operations as well as Allete Clean Energy. An additional portion will be considered for use in a stock repurchase program.
U.S. Water Services became a world-class industrial water service provider in North America during Allete’s four-year ownership and investment. This sale will enable them to continue to grow.
“Kurita is a well-respected global enterprise, and this agreement is a win-win for Allete and U.S. Water Services,” Adams says. “This action will provide new opportuntiies for U.S. Water Services to expand and grow the business, while enabling Allete to [re]allocate capital resources.”
The sale comes just two days after Allete named Bethany Owen as its new president.