Pennon Group plc is pleased to announce that on 10 January 2024 it acquired 100% of the issued capital of Sumisho Osaka Gas Water UK Limited, the holding company of Sutton and East Surrey Water plc (“SES Water”) and certain other ancillary businesses, for £89 million from Sumitomo Corporation and Osaka Gas, with a total enterprise value of £380 million.
The Acquisition of SES Water and other ancillary businesses will add a high-quality business to the Group with over 750,000 customers and a forecast shadow Regulatory Capital Value (“RCV”) of £351 million as of 31 March 2024. The enterprise value equates to a premium to SES Water 2023 RCV of c.6% and will increase the Group’s RCV by c.7% on Acquisition.
Furthermore, Pennon’s ownership and approach to the local delivery of local services will give SES Water customers greater advocacy, involvement and ownership in their water provider with Pennon’s unique share issuance scheme WaterShare+, providing SES Water customers with the opportunity to become shareholders in their local water company.
The Acquisition will increase the size and scale of the Group to serve a total population of c.4.3 million and will bring total expected RCV growth for Pennon to 71% over K7. It also adds another 476 dedicated employees to the Group, enabling access to a new, wider and diverse talent pool in Southern England.