LONDON, UK: Pennon Group plc has acquired 100% of the issued capital of Sumisho Osaka Gas Water UK Limited (SOGWUK), 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.

Pennon is also announcing its intention to issue new Ordinary Shares to raise up to £180 million in connection with the acquisition, in order to ensure that the pro forma leverage and capital structure for the enlarged group following the acquisition remains consistent with Pennon’s well-established water business gearing range of 55-65%.

Commenting on the Acquisition, Susan Davy, Group Chief Executive 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.”

Th acquisition builds on Pennon’s existing water operations by acquiring another high-quality, water-only business, along with access to an experienced and talented management team, and follows the successful previous acquisitions of two water-only companies.

Acquisition will benefit SES Water’s customers and other stakeholders – SES Water’s customers will be offered the opportunity to participate in Pennon’s unique WaterShare+ customer shareholding scheme.