During Fast Money's Dirty Trade feature, CEO Nicholas DeBenedictis reveals that his company Aqua American (WTR) - the biggest US water company- has received takeover interest from potential buyers. "We have been approached," he says.
When Fast Money host, Dylan Ratigan asks whether the interested parties were strategic bidders or private-equity firms, DeBenedictis replies "both, as a matter of fact." He fails to provide further details, but added that Aqua American may also acquire smaller US water companies. "If anybody is for sale we’d be looking."
Here are more excerpts from the interview.
DeBenedictis says “Over a quarter trillion dollars will have to be invested just in our country (in water) over the next 20 years.”
Is there not enough clean water?
“Pipes are getting older; plants have to be upgraded and many of our municipalities have not taken care of (these maintenance issues)” says DeBenedictis. “So money will have to be spent because you can’t live without water.”
Tell us more.
“85% of the market is municipal (public). There are only 10 publicly traded water companies and there are about 30,000 small mom and pop companies,” DeBenedictis explains. “Part of the story for investors, is the roll up of these mom and pops - and privatization of the municipal market into more efficient private hands.”
Are you selling water or pipes and such?
“We sell the water, “ says DeBenedictis. “But to get the water to your home we might have to invest in pipe and that’s what the regulators allow us to raise prices on.”
Why is stock flat over the year?
“Both VE and Suez (competitors) went down over the last few years and they’re coming back” explains DeBenedictis.