Allete To Buy U.S. Water Services

(RTTNews) - Allete, Inc. (ALE) said Tuesday that it has agreed to buy U.S. Water Services, Inc., an integrated industrial water management company.

Allete will initially purchase 87% of U.S. Water for $168 million, based on a total implied enterprise value of $194 million. Current employees and management of U.S. Water will continue to own the remaining 13%. Allete will purchase the remaining 13% interest in the future for a contingent amount based on U.S. Water's future earnings.

The deal is expected to close upon satisfaction of customary closing conditions, including compliance with Hart-Scott-Rodino antitrust clearing requirements.

Headquartered in St. Michael, Minnesota, U.S. Water serves a growing and diverse mix of over 3,600 industrial customers, including a significant number of Fortune 500 companies. U.S. Water generated revenue of about $120 million during 2014, and Allete projects future revenue growth of 10 percent to 15 percent annually.

Allete expects the acquisition to provide long-term earnings growth and diversity, and have no material impact on 2015 earnings per share.

Allete said its previously stated 2015 earnings guidance is unchanged, and excludes transaction costs.