Middlesex Water Company (NASDAQ: MSEX) announced that its subsidiary, Tidewater Utilities (TUI), has completed the acquisition of Ocean View water system assets in Sussex County, Delaware for $4.6 million. The acquisition includes a water system serving approximately 900 customers, who have been receiving water supply from TUI since 2008.
TUI has been managing water distribution, meter reading, customer billing, and operational services through its subsidiary, White Marsh Environmental Systems. The Delaware Public Service Commission approved the acquisition on February 19, 2025. The deal ensures rate equity for Ocean View residents, as TUI will maintain existing water rates during the transition period.
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Middlesex Water's acquisition of Ocean View's water system represents a strategic consolidation that transforms a long-standing service relationship into full asset ownership. At $4.6 million for approximately 900 customers ($5,111 per connection), the pricing appears reasonable within industry standards for small water system acquisitions.
This transaction exemplifies the ongoing trend of investor-owned utilities acquiring municipal water systems. The 17-year history between Tidewater and Ocean View significantly reduces integration risk – TUI has intimate knowledge of the system's infrastructure, operations, and customer base, having supplied water since 2008 and handled distribution, metering, billing and operations through its subsidiary.
Delaware Public Service Commission's approval signals regulatory support, highlighting the favorable regulatory environment in which Tidewater operates. The commitment to rate stability during transition addresses a key concern for acquired customers while providing regulatory predictability for the company.
While modest in size relative to Middlesex's $1.15 billion market capitalization, these types of bolt-on acquisitions collectively strengthen the company's regional presence and enable operational efficiencies through increased density in service territories. For Ocean View residents, the transition brings them under Public Service Commission oversight, potentially providing enhanced customer protections and service options compared to municipal management.
The $4.6 million acquisition of Ocean View's water system represents a modest 0.4% of Middlesex Water's market capitalization but delivers strategic value beyond its immediate financial impact. This transaction converts a service arrangement into an owned asset generating direct revenue, improving long-term economics compared to the previous fee-based model.
At approximately $5,111 per customer connection, the acquisition pricing appears reasonable against industry benchmarks where small water systems typically trade between $3,000-$7,000 per connection depending on infrastructure age, condition, and required capital investments.
The acquisition presents minimal integration costs given Tidewater's 17-year operational history with this system. This established relationship likely allows for immediate operational synergies and eliminates many transition risks typically associated with utility acquisitions. The existing relationship through White Marsh Environmental Systems also means customer billing systems integration should be seamless.
While rate stability commitments may temporarily limit pricing flexibility, they provide revenue predictability. Small, strategic acquisitions like this one collectively contribute to Middlesex's growth strategy in the fragmented water utility sector, where larger operators achieve economies of scale through consolidation. The regulated nature of water utilities provides stability to the revenue stream from these acquired assets, adding incremental value to shareholders through predictable returns.
ISELIN, N.J., April 02, 2025 (GLOBE NEWSWIRE) -- Middlesex Water Company (NASDAQ: MSEX) announced today that its subsidiary, Tidewater Utilities, Inc. (TUI), completed its acquisition of the water system assets of the Town of Ocean View (TOV) in Sussex County, Delaware for $4.6 million.
“We are delighted to welcome Ocean View residents as our newest Tidewater customers,” said Bruce E. Patrick, President of TUI. “Maintaining the same water rates for all Ocean View residents during this transition is of the utmost importance to our team. We remain steadfast in our commitment of delivering clean, safe, reliable water service to our customers and remaining good community partners, just as we have for the past 17 years.”
The newly acquired TOV water system serves approximately 900 customers, who have been receiving water supply from TUI since the system was constructed in 2008. TUI also has been providing water distribution, meter reading, customer billing, and operational services to TOV during this time through its subsidiary, White Marsh Environmental Systems, Inc.
On February 19, 2025, the Delaware Public Service Commission approved TUI’s application to purchase the water assets of TOV and the right to provide water service to its existing customers.
“The sale of the Ocean View water distribution system to Tidewater Utilities presents benefits to the Town in several ways,” said Town Manager Carol Houck. “First and foremost, it ensures rate equity to our former water customers as Tidewater is subject to the regulations of the Delaware Public Service Commission. Likewise, Tidewater, a trusted partner to the Town for many years, will enhance customer service options to our former customers.”
Ocean View customers will receive additional information in the mail from TUI. Information also is available on the Tidewater website at www.TUIWater.com.
About Tidewater Utilities, Inc.
Tidewater Utilities, Inc. (“Tidewater”), a wholly owned subsidiary of Middlesex Water Company, is celebrating over 60-years of service to Delawareans. Tidewater is the largest private water supplier south of the Chesapeake & Delaware Canal in Delaware. The Company operates 172 active wells and 85 water treatment plants to serve approximately 62,000 customers in 480 separate communities in New Castle, Kent and Sussex County, Delaware.
About Middlesex Water Company
Middlesex Water Company (“Middlesex”) (NASDAQ: MSEX) is one of the nation’s premier investor-owned water and wastewater utilities. Established in 1897, Middlesex is a trusted provider of life-sustaining services to more than half a million people in New Jersey and Delaware. The company focuses on employee engagement, operational excellence, superior customer experience, investment in infrastructure, and selective and sustainable growth to deliver value to our customers, investors, and the communities we serve.
Media Contact:Brian Hague, Vice President of Communications & Corporate Affairs[email protected](732) 638-7549