BHC Agrees To Acquire Village Water Company.

BRIDGEPORT, Conn--(BUSINESS WIRE)--March 10, 1999--Aquarion company's (NYSE:WTR) major water utility subsidiary, BHC Company (BHC), has signed a letter of intent to acquire the remaining stock of the closely held Village Water Company in Simsbury, Conn., it was announced today by Daniel A. Neaton, Aquarion vice president of planning and corporate development. In 1998, BHC acquired 9 percent of Village Water Company's common stock.

Terms of the letter of intent call for BHC to pay Village shareholders $150 per share. The value of the transaction is $6.5 million in cash, which includes payment for outstanding debentures that may be converted to common shares prior to closing. A definitive merger agreement is expected to be signed within 60 days.

"This is a strategic investment for BHC in a major growth area of the state," Neaton stated. "Village Water is one of several private water utilities that are close to our service area in northwest Connecticut," he said.

Village Water Company, which has approximately 5,000 customers and seven employees, has annual revenues of $1.8 million.

The transaction is subject to approval by Village shareholders and BHC's Board of Directors. Additionally, the merger must be approved by the Connecticut Department of Public Utility Control, which should occur within 120 days after shareholder approval.

"BHC has gained a reputation for being one of the best water utilities in the state with top customer service, water quality and efficiency ratings," Neaton commented. "We are looking forward to providing Village Water Company's customers with the same level of water-management expertise and responsive service as the rest of our customers receive," he said.

Neaton noted that the acquisition of water utilities is a key element of the company's growth strategy and one of several to increase earnings and enhance shareholder value. Those additional strategies include: aggressive cost containment, enhancement of earnings and asset utilization through the sale of surplus, off-watershed water company land, and contract management of municipal water supply systems.

Aquarion Company's principal business is public water supply. Through its BHC and Sea Cliff Water Company subsidiaries, it is one of the 10 largest investor-owned water utilities in the US and serves a population of more than 500,000 in 30 Connecticut and Long Island, NY communities. Other businesses include real estate through the sale of surplus water company land, and contract management of municipal water systems. Aquarion also owns a small timber processing company.

Note to Reporters and Editors: For more information on Aquarion Company and its subsidiaries, please visit us on the Internet at www.aquarion.com or www.bhcco.com.