American Water Announces Agreement to Acquire Pivotal Home Solutions

VOORHEES, N.J.–(BUSINESS WIRE)–American Water Works Company, Inc. (NYSE: AWK), the largest publicly
traded U.S. water and wastewater utility company, today announced that
it has agreed to acquire Pivotal Home Solutions from Southern Company
Gas, a subsidiary of Southern Company, for approximately $365 million in
cash, including estimated working capital.

Acquired through its American Water Enterprises (AWE) subsidiary and
highly complementary to AWE’s Homeowner Services Group (HOS), Pivotal
Home Solutions is a home warranty business operating in 18 states with
about 1.2 million customer contracts. Pivotal Home Solutions offers
coverage for a wide variety of home appliances, heating and cooling
systems, and lines in and around a home.

“The employees of Pivotal Home Solutions, like those in American Water’s
HOS group, are focused on providing outstanding customer service, as
evidenced by both of our organizations achieving the Better Business
Bureau’s highest rating.” said Susan Story, president and CEO of
American Water. “Additionally, this is an opportunistic transaction for
American Water as it provides a strong platform for long-term and
capital-light organic growth.”

Deborah Degillio, president of American Water Enterprises, added, “This
acquisition delivers on one of our growth strategies to expand our
complementary businesses. Coupled with our existing Homeowner Services
portfolio, this acquisition will enhance our ability to provide
additional home warranty solutions across the U.S., nearly doubling our
customer contracts. We look forward to leveraging the expertise of the
talented team of Pivotal Home Solutions employees who have built this
successful organization.

“This acquisition also creates a tremendous opportunity from a product
line perspective and for cross-selling our core water and wastewater
products,” added Degillio.

The closing of the acquisition is subject to certain conditions,
including obtaining necessary regulatory approvals and consents, the
expiration or termination of the applicable waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, and other
customary closing conditions and deliveries. Upon completion of the
acquisition, Pivotal Home Solutions will be part of American Water’s
home warranty businesses, while maintaining its current name and main
operations in Naperville, Ill.

American Water anticipates closing the transaction by second quarter
2018.

American Water’s Homeowners Services Group operates in 43 states and
Washington, D.C., and currently services more than 1.8 million
contracts. The Homeowner Services Group has been providing protection
programs for more than 15 years, has an A+ Rating from the Better
Business Bureau and holds a 97 percent customer satisfaction rating. It
also provides its Protection Programs to homeowners through municipal
partnerships with the New York City Department of Environmental
Protection, Orlando Utilities Commission, Nashville Metro Water Services
and others.

Investor Conference Call

An investor conference call regarding the Pivotal Home Solutions
acquisition and a strategic update will take place on Thursday, Apr. 12,
2018, at 9 a.m. Eastern Daylight Time. Interested parties may listen to
the conference call over the Internet by logging on to the Investor
Relations homepage at ir.amwater.com.
Presentation slides that will be used in conjunction with the investor
conference call will also be made available online following the call.
The company recognizes its website as a key channel of distribution to
reach public investors and as a means of disclosing material non-public
information to comply with its obligations under SEC Regulation FD.

Following the investor conference call, an audio archive of the call
will be available through Apr. 18, 2018. U.S. callers may access the
audio archive toll-free by dialing 1-877-344-7529. International callers
may listen by dialing 1-412-317-0088. The access code for replay is
10119143. The audio webcast will be available on American Water's
investor relations homepage at ir.amwater.com
through May 12, 2018. After that, the archived webcast will be available
for one year at ir.amwater.com/event-replays.

About Pivotal Home Solutions

Since 1992, the home warranty plans offered by Pivotal Home Solutions
have helped protect homeowners from the costs of unexpected repairs to
their home’s systems, lines and/or appliances. Pivotal Home Solutions’
operations includes approximately 1.2 million repair and maintenance
plans in 18 states.

About American Water

With a history dating back to 1886, American Water is the largest and
most geographically diverse U.S. publicly traded water and wastewater
utility company. The company employs more than 6,900 dedicated
professionals who provide regulated and market-based drinking water,
wastewater and other related services to an estimated 15 million people
in 46 states and Ontario, Canada. American Water provides safe, clean,
affordable and reliable water services to our customers to make sure we
keep their lives flowing. For more information, visit amwater.com
and follow American Water on Twitter,
Facebook
and LinkedIn.

Cautionary Statement Concerning Forward-Looking Statements

Certain statements included in this press release are forward-looking
statements within the meaning of the federal securities laws. In some
cases, these forward-looking statements can be identified by words with
prospective meanings such as “intend,” “plan,” “estimate,” “believe,”
“anticipate,” “expect,” “predict,” “project,” “propose,” “assume,”
“forecast,” “outlook,” “future,” “pending,” “goal,” “objective,”
“potential,” “continue,” “seek to,” “may,” “can,” “will,” “should” and
“could,” or the negative of such terms or other variations or similar
expressions. Forward-looking statements relate to, among other things,
the anticipated timing of the closing and the ability to obtain the
regulatory consents and approvals required to complete, and satisfying
other conditions to the closing of, the acquisition of Pivotal Home
Solutions; the ability of the company to finance the purchase price for
the acquisition; the occurrence of the benefits and synergies expected
or predicted to occur as a result of the completion of such acquisition;
and unexpected costs, liabilities or delays associated with the
acquisition and integration of Pivotal Home Solutions’s assets, business
and operations. These forward-looking statements are predictions based
on the company’s current expectations and assumptions regarding future
events. They are not guarantees or assurances of any outcomes,
performance or achievements, and readers are cautioned not to place
undue reliance upon them. The forward-looking statements are subject to
a number of estimates and assumptions, and known and unknown risks,
uncertainties and other factors. Actual results may differ materially
from those discussed in the forward-looking statements included in this
press release as a result of the factors discussed in the company’s Form
10-K for the year ended Dec. 31, 2017, and in other filings with the
Securities and Exchange Commission, and the additional risks,
uncertainties, assumptions and limitations described herein.

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Contacts

American Water Works Company, Inc.
Edward Vallejo
Vice
President, Investor Relations
856-566-4005
[email protected]
or
Maureen
Duffy
Vice President, Communications and Federal Affairs
856-309-4546
[email protected]