Boenning & Scattergood Acts as Financial Advisor to Pennichuck in Sale to City of Nashua, N.H.

Boenning & Scattergood, Inc., an independent securities, asset management and investment banking firm, acted as exclusive financial advisor to Pennichuck Corp. in its sale to the City of Nashua, N.H.

Under the terms of the transaction, which closed January 25th, the city acquired all outstanding Pennichuck shares at a price of $29.00 per share, or approximately $138 million in cash. According to the Company, the city also assumed some $60 million of the company's outstanding debt, resulting in a total transaction value of nearly $200 million. As a result of the transaction, Nashua acquired multiple businesses, including three regulated utilities, a real-estate holding company and a water services company.
This sale brought an end to a nearly decade-long legal dispute which initially saw Nashua attempt to take over Pennichuck via eminent domain. In 2008, state utility regulators had approved the taking of the Pennichuck Water Works assets serving Nashua for $243 million, including a $40 million mitigation fund for the non-city utilities, but the city balked at the high price. Subsequently, the parties began talks on a negotiated sale of all of Pennichuck Corp. in early 2009, which culminated in the agreement for this sale being signed in November 2010. After obtaining approval of the sale from the New Hampshire Public Utilities Commission, and the successful completion of a bond issue for the financing of the deal, the acquisition was completed this week.

"We are very pleased to have advised Pennichuck in reaching a negotiated solution to its eminent domain issue with the City of Nashua," said Bill Malarkey, Managing Director with Boenning & Scattergood's investment banking group. "This transaction was lengthy and complicated with both parties benefiting in the end. The City of Nashua succeeded in gaining control of its water supply at a substantial savings and Pennichuck shareholders received a much better tax treatment than would have been the case under an eminent domain taking."

The Boenning & Scattergood team advising Pennichuck on this transaction included Malarkey and James Adducci, Director. Boenning & Scattergood's investment banking practice is a strategic advisor to national and international clients across various segments of the water and industrials sector, including investor-owned utilities, equipment and technology companies, water rights developers and water service providers.