Thousands of homes in south London will see their water supplier change hands, as FTSE 250 utilities firm Pennon Group bought Sutton and East Surrey Water (SES) today.
SES supplies water to 750,000 people in London, Surrey, West Sussex and Kent.
The purchase price is £89 million, but this implies an enterprise value of £380 million after accounting for SES’s debts.
Pennon said the deal has already been completed, but must still be approved by the CMA with Ofwat input.
Pennon boss Susan Davy said: "SES Water is a fantastic fit for Pennon as we further expand our presence in water supply across Southern England, building on our successful similar acquisitions of Bournemouth Water and Bristol Water alongside the adoption of water supply in the Isles of Scilly.
The business is a proven, high-quality water operation. We are particularly impressed by the innovation and technology-led solutions implemented by SES Water.
As part of the Pennon Group, we will enhance SES Water's financial resilience and better position the business to serve its customers and all stakeholders, as has proven to be the case with our acquisitions of Bournemouth Water and Bristol Water.
We are able to invest in SES Water's resources infrastructure, environment and people thanks to our strong financial performance and long-term UK shareholder base, delivering a seamless transition for SES Water's customers while also providing a more robust and reliable service in the medium term.
We expect SES customers to benefit from Pennon's stewardship of the business, including being able to offer them the opportunity to participate in our unique WaterShare+ scheme and participate in the ownership of their local water provider.”
The deal comes at a time of turmoil for the water sector, which has faced criticism for high debts and rates of sewage leakage.
