Water for Profit: Undaunted by Tight Regulations and Huge Infrastructure Costs, Companies are Diving into the Water Business.
Source: Alix Stuart, CFO, Vol. 23 no. 1, February 2007
When most CFOs think about liquidity, they're calculating how fast they can turn assets into cash. But Aqua America finance chief David Smeltzer is just as likely to be concerned about how smoothly water is flowing through the 10,000 miles of pipes his company owns. As the largest among a handful of publicly traded companies in America that are in the business of purifying and delivering tap water, Aqua America has operations in 13 states from Maine to Texas. Having kept up a steady pace of acquisitions — 25 to 30 per year for the past five years — Smeltzer says his company will continue its aggressive expansion. "There are unlimited targets out there," he says.
….Cash-strapped municipalities need help in updating and operating their aging waterworks, and deep-pocketed companies like Aqua America are offering their services. Most of the pipes and other infrastructure in this country are in dire need of replacement, requiring an investment of around $500 billion from 2000 through 2019, according to Environmental Protection Agency (EPA) estimates….