Eversource Energy ES announced that it has entered into a definitive agreement to sell Aquarion Water Company (Aquarion) to the Aquarion Water Authority, a quasi-public corporation and political subdivision of the State of Connecticut and a standalone, newly created water authority alongside the South Central Connecticut Regional Water Authority.

The total enterprise value of the deal is around $2.4 billion, subject to some closing adjustments. This includes around $1.6 billion in cash and $800 million in net debt that will be paid off at closing. At December 2024, the total value was equivalent to 1.7X the rate base.

By effectively reinvesting resources into its core electric and natural gas operations, Eversource Energy will be able to pay down parent company debt with the proceeds of the sale. This should strengthen Eversource Energy's financial position and allow for greater investments in customer reliability.

Due to this deal, Eversource Energy anticipates that its fourth-quarter 2024 results will include a loss of almost $300 million on the anticipated sale of Aquarion. The expected income tax expense for this selling loss is around $140 million. Eversource reaffirms its long-term EPS growth target of 5-7% through 2028.

The transaction is subject to regulatory approval by the Connecticut Public Utilities Regulatory Authority, the Massachusetts Department of Public Utilities, and the New Hampshire Public Utilities Commission, as well as other approvals pursuant to the Hart-Scott-Rodino Antitrust Improvements Act and other customary closing conditions. The transaction is expected to be closed in late 2025.

Focus on Regulated Business

As the largest regulated utility in New England, this deal reaffirms Eversource Energy’s dedication to its core natural gas and electric operations. It also strengthens its financial sheet and enables it to optimize its portfolio while reinvesting resources for the benefit of the customers.

Eversource Energy sold its South Fork and Revolution Wind projects to Global Infrastructure Partners in September 2024. The adjusted gross proceeds from the transaction were $745 million. The divestiture of the assets resulted in Eversource Energy’s exit from the offshore wind business. The company now concentrates on its resources to become a pure-play regulated utility. These assets should deliver low-risk regulated growth opportunities and enable ES to provide clean energy transition benefits to its customers.

Along with ES, in January 2025, Algonquin Power & Utilities Corporation AQN completed the sale of its non-regulated renewable energy business to a wholly owned subsidiary of LS Power for a total consideration of up to $2.5 billion, excluding debt. Algonquin Power intends to use the net proceeds from the transaction to pay down existing debt and further strengthen its balance sheet. This transaction marks a milestone in the company’s efforts to turn AQN into a simpler, pure-play regulated utility. This should enable AQN to focus better on increasing the pace of energy transition.

ES’ Stock Price Performance

In the past month, shares of the company have risen 1.7% compared with the industry’s 2% growth.

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ES’ Zacks Rank & Stocks to Consider

The company currently carries a Zacks Rank #3 (Hold).

Some better-ranked companies from the same industry are CenterPoint Energy CNP and IDACORP IDA, both carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

CNP’s long-term (three-to-five-year) earnings growth rate is 7.12%. The Zacks Consensus Estimate for 2025 EPS indicates a year-over-year increase of 7.3%.

IDA’s long-term earnings growth rate is 8.31%. The Zacks Consensus Estimate for 2025 EPS indicates a year-over-year increase of 8.3%.

 

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