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$7 Million Merger Adds Three Water Systems and a Wastewater System To Philadelphia Suburban

Deal Represents PSC's First Entry into Growing Private Wastewater Market

BRYN MAWR, Pa., Nov. 25 /PRNewswire/ -- Officials from Philadelphia Suburban Water Company (PSW) -- the primary subsidiary of Philadelphia Suburban Corporation (NYSE: PSC) -- announced that today that late Friday (November 22) it completed a merger with Utility Group Services (UGS) valued at $7 million, for the Spring Run, Friendship and Bradford Glen Water Companies and the Little Washington Drainage Company -- a wastewater system -- in Chester County.

For PSW, the merger adds to its water customer base approximately 8,500 residents from a 49-square-mile service area which encompasses West Bradford, East and West Brandywine and Newlin Townships. Approximately 900 of the East Brandywine residents are also served by the private wastewater system. Population in the new service areas is expected to grow by 50 percent over the next 10 years.

The merger represents PSW's initial entry into the wastewater business. "We feel that the wastewater business is a natural for us because we can take advantage of the economies of scale that exist due to the overlap of business and operations functions in the drinking water industry and wastewater industries including water purification and quality testing," said PSC Chairman Nicholas DeBenedictis. "One of the greatest opportunities this presents for us is the ability to affect the quality of wastewater discharges being released into streams."

The $7 million transaction is composed of the assumption of $2 million of UGS debt with 70 percent preferred stock and 30 percent cash being used to pay the balance. The merger is part of PSW's growth-through-acquisition strategy which has resulted in 16 water system acquisitions since 1992 including five to date in 1996. Last month, PSW acquired its fourth water system this year (Hatboro, 13,000 residents) for $10.5 million.

PSW is one of the nation's largest regional water systems and the third largest investor-owned water utility in the country, providing service to 850,000 residents in Delaware, Montgomery, Chester and Bucks Counties.

SOURCE Philadelphia Suburban Corporation
 -0- 11/25/96

/CONTACT: Donna Alston, Director, Communications of Philadelphia Suburban, 610-645-1095/


CO: Philadelphia Suburban Corporation; Philadelphia Suburban Water Company ST: Pennsylvania IN: UTI SU: TNM

MK -- PHM006 -- 3496 11/25/96 08:56 EST
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Publication:PR Newswire
Date:Nov 25, 1996
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