On 16 April 2015, Pennon Group Plc announced the acquisition of 100% of Sembcorp-owned Bournemouth Water for US$285 million including debt (£187 million). Pennon Group is an environmental services and utility firm whose principal holdings include regional utility South West Water, and Viridor waste management services.
Bournemouth Water, acquired by Sembcorp in July 2010, is England’s 16th largest utility. The utility’s activities are exclusive to supplying water only. The firm generated US$81 million in revenue in 2013-2014 with an operating profit of $25 million.
Both South West and Bournemouth received Final Price Determinations from UK regulator Ofwat in December 2014, with South West achieving Enhanced Utility status earlier in the year.
Bluefield Takeaways
- South West expansion positions the firm for future competition
- Enhanced utility status, efficiency awards to deliver operational improvements to Pennon water holdings
- Non-household liberalization a warm-up for broader competition
