Innovative SolutionSM to
Meet Growing Water and Wastewater Challenges
HARRINGTON PARK, N.J.--(BUSINESS WIRE)--
United Water, one of the nation's leading water and environmental
services companies and a subsidiary of SUEZ ENVIRONNEMENT, together with
KKR, a leading global investment firm, announced the signing today of a
partnership with the Borough Authority of Middletown, PA for management
and operations of the borough's water and wastewater system.
United Water, which has its Pennsylvania headquarters in the capital
city of Harrisburg, already operates five water treatment facilities and
over 20 wells serving a population of more than 166,000 people in
portions of eight Pennsylvania counties. "We are excited to expand our
services in Pennsylvania and to become a part of the growing Middletown
community," said Bertrand Camus, CEO of United Water. "This partnership
marks a growing trend in the U.S. for delivering infrastructure renewal
projects for essential public services by drawing upon the strengths and
balancing the needs of multiple sectors; both public and private."
The innovative public-private partnership, a joint venture between
United Water and KKR, will begin a 50-year water and wastewater
concession in Middletown on January 1, 2015 - similar to the partnership
the joint venture began with the Municipal Utilities Authority in
Bayonne, NJ in December 2012. The concession will generate revenues of
over $285 million during its 50 year life.
Under the agreement, the joint venture has made an initial payment to
the Middletown Borough Authority of $43 million, which will be used to
eliminate the Authority's existing debt and pension liability as well as
improve its finances. The joint venture has also committed to financing
another $83 million for the system infrastructure improvements over the
life of the contract. KKR, which made the investment through its
infrastructure fund, will fund 90% of the joint venture with United
Water funding the remaining 10%.
Brandon Freiman, a Director on KKR's Energy & Infrastructure team, said:
"We are thrilled to help bring this innovative solution to the Borough
of Middletown. The operational and environmental stewardship of United
Water, combined with our commitment to invest in the system, creates a
sustainable model that we believe produces tangible benefits for the
Borough and its residents for a very long time."
The Middletown Borough Authority will maintain ownership of the water
and wastewater system and will provide oversight of the partnership and
its adherence to high quality standards and customer service
performance. In addition, the Authority will maintain control of rates
charged to users, which will be guided by a formula in the agreement.
United Water will operate the system for the 50-year term under an
operations and maintenance agreement with the joint venture.
"This model is a blend of United Water's operations expertise and KKR's
long-term vision, which brings credibility to address America's water
challenges. Our commitment to funding improvements in the water and
wastewater system is critical to keeping rates stable and under the
Middletown Borough Authority's control," said Camus. "KKR has a history
of making infrastructure investments, as shown in our successful
Bayonne, NJ operation, and a proven commitment to improving the
operational and environmental performance of the companies in its
portfolio, making it an ideal partner for this investment."
United Water will operate and maintain six groundwater sources, 36 miles
of water main, one wastewater treatment plant and 25 miles of sewer
main, as well as manage and deliver capital upgrades. The objectives
will include a strong focus on environmental, health and safety
performance and an improvement to the services delivered to 9,400 people
in Middletown, a number which is expected to grow over the term of the
About United Water
United Water is one of the nation's leading environmental companies,
providing water and wastewater services to over 5.3 million people in
the United States. In addition to owning and operating 16 water and
wastewater utilities, United Water operates 84 municipal and industrial
water and wastewater systems through innovative public-private
partnerships and contract agreements. Founded in 1869, United Water is a
subsidiary of SUEZ ENVIRONNEMENT.
KKR is a leading global investment firm that manages investments across
multiple asset classes including private equity, energy, infrastructure,
real estate, credit and hedge funds. KKR aims to generate attractive
investment returns by following a patient and disciplined investment
approach, employing world-class people, and driving growth and value
creation at the asset level. KKR invests its own capital alongside its
partners' capital and brings opportunities to others through its capital
markets business. References to KKR's investments may include the
activities of its sponsored funds. For additional information about KKR
& Co. L.P. (NYSE: KKR), please visit KKR's website at www.kkr.com.
Follow KKR on Twitter @KKR_Co.
About SUEZ ENVIRONNEMENT
Natural resources are not infinite. Each day, SUEZ ENVIRONNEMENT (Paris:
SEV, Brussels: SEVB) and its subsidiaries deal with the challenge of
protecting resources by providing innovative solutions to industry and
to millions of people. SUEZ ENVIRONNEMENT supplies drinking water to 92
million people, provides wastewater treatment services for 65 million
people and collects the waste produced by 52 million people. SUEZ
ENVIRONNEMENT has 79,550 employees and, with its presence on five
continents, is a world leader exclusively dedicated to water and waste
management services. SUEZ ENVIRONNEMENT generated total revenues of EUR
14.6 billion in 2013.
Source: United Water
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