California Water Service Group Announces Agreement to Purchase Nexus Water Group’s Nevada and Oregon Water and Wastewater Systems, Solidifying Its Position as the Largest Regulated Water Utility in the Western U.S. and Creating a Platform for Additional Growth

Rhea-AI Summary

California Water Service Group (NYSE: CWT) agreed to acquire Nexus Water Group’s Nevada and Oregon water and wastewater systems, adding approximately 36,000 equivalent residential connections and a combined rate base of ~$109 million as of Dec. 31, 2025. The purchase price is ~$218 million, subject to closing adjustments.

The deal is expected to close by the end of 2026, subject to public utility commission approvals, will be funded with working capital and existing debt and equity facilities, and is expected to be accretive within one year of closing.

Positive

• Adds approximately 36,000 equivalent residential connections
• Combined rate base of approximately $109 million (Dec. 31, 2025)
• Purchase expands footprint to ~584,000 service connections across seven states
• Transaction expected to be accretive within one year of closing

Negative

• Purchase funded with working capital and existing debt/equity facilities (potential leverage impact)
• Closing subject to public utility commission approvals and other customary conditions

Key Figures

Added connections: approximately 36,000 equivalent residential connections Acquired rate base: approximately $109 million Purchase price: approximately $218 million +5 more

8 metrics

Added connections approximately 36,000 equivalent residential connections Nevada and Oregon water and wastewater systems being acquired

Acquired rate base approximately $109 million Combined rate base at December 31, 2025 for acquired systems

Purchase price approximately $218 million Agreed consideration, subject to typical closing adjustments

People served post-deal roughly two million people Total population served after closing in seven western states

Service connections post-deal approximately 584,000 service connections Total connections across seven western states after acquisition

Expected closing timing end of 2026 Target completion date subject to regulatory approvals

Accretion timing within a year of closing Management expectation for accretion to existing operations

Conference call time 8 a.m. PT on February 26 Call to discuss the transaction

Market Reality Check

Price: $46.37 Vol: Volume 285,070 is below t...

normal vol

$46.37 Last Close

Volume Volume 285,070 is below the 20-day average of 364,125 (relative volume 0.78), suggesting a subdued pre-news session. normal

Technical Shares at $46.37 are trading above the 200-day MA of $45.77 and about 10% below the 52-week high of $51.63.

Peers on Argus

CWT was roughly flat (-0.09%) while peers were mixed: AWR +0.59%, WTRG +0.71%, A...

CWT was roughly flat (-0.09%) while peers were mixed: AWR +0.59%, WTRG +0.71%, ARIS +4.43%, CPK -0.38%, MSEX -0.58%. Moves do not point to a unified sector trend around this announcement.

Historical Context

5 past events · Latest: Feb 18 (Positive)

Pattern 5 events

Date	Event	Sentiment	Move	Catalyst
Feb 18	Philanthropy initiative	Positive	-1.6%	Announced nearly $1.88M in 2025 donations to local communities.
Feb 10	Scholarship program	Positive	-0.8%	Opened 13th annual scholarship program with up to $80,000 in awards.
Feb 05	Earnings scheduling	Neutral	-1.4%	Set dates for 2025 full-year and Q4 earnings release and call.
Feb 03	Leadership recognition	Positive	+1.1%	CEO joined newly formed CalCEO Council on economic policy.
Jan 28	Dividend increase	Positive	+1.9%	Announced 8% dividend increase and 324th consecutive quarterly dividend.

Pattern Detected

Recent CWT headlines on community giving and scholarships had positive tone but modest negative price reactions, while dividend and leadership news aligned with positive moves, suggesting investors respond more to financial/strategic items than CSR updates.

Recent Company History

Over the last month, CWT issued several corporate updates, including community donations of nearly $1.88M, a scholarship program offering up to $80,000, and CEO participation in the CalCEO Council. A key financial milestone was the 8% annual dividend increase to $1.34 and the 324th consecutive quarterly dividend, which coincided with a positive price reaction. Compared with those items, today’s planned $218M Nevada/Oregon acquisition represents a larger strategic expansion of the regulated footprint.

Market Pulse Summary

This announcement outlines a significant bolt-on acquisition that adds approximately 36,000 connecti...

Analysis

This announcement outlines a significant bolt-on acquisition that adds approximately 36,000 connections and a combined rate base of about $109M for a purchase price near $218M. It reinforces CWT’s role as the largest regulated water utility in the western U.S. and expands its presence to seven states and roughly 584,000 service connections. Investors may track regulatory approvals, closing by the end of 2026, and whether operations become accretive within a year of completion.

Key Terms

rate base, wastewater systems, working capital, public utility commissions, +1 more

5 terms

rate base financial

"adding approximately 36,000 equivalent residential connections and a combined rate base of approximately $109 million"

Rate base is the dollar value of the physical assets and capital a regulated utility uses to deliver its service — things like power plants, pipes, or equipment. Regulators use that value as the starting point to set prices the utility can charge by allowing a specific percentage return on that base, so a larger or higher-valued rate base usually means higher permitted revenues and therefore directly affects investor earnings and the company's ability to raise capital.

wastewater systems technical

"purchase Nexus Water Group’s Nevada and Oregon water and wastewater systems"

Wastewater systems are the networks of pipes, pumps, treatment plants and facilities that collect, clean and safely return used water from homes, businesses and industry to the environment. For investors they matter because these systems are large, long-lived infrastructure assets whose performance affects revenue, operating costs, regulatory compliance and environmental liability—similar to a city’s plumbing, where failures or upgrades can mean big, predictable expenses or steady income streams.

working capital financial

"purchase price of approximately $218 million ... will be funded with working capital and existing debt and equity facilities"

Working capital is the money a business has available to cover its daily expenses, like paying bills and buying supplies. It’s like the cash in your wallet that helps you handle everyday costs; having enough ensures the business can operate smoothly without running into money shortages.

public utility commissions regulatory

"subject to customary closing conditions, including approval from applicable public utility commissions"

Public utility commissions are government agencies that regulate essential services like electricity, water, natural gas and telecommunications, overseeing rates, service standards and major infrastructure decisions. For investors they matter because these commissions approve price changes and new projects that directly affect a utility’s revenue and costs—think of them as referees who decide whether a business can raise its prices or must make expensive upgrades, which influences profits and investment risk.

rate base financial

"a combined rate base of approximately $109 million at December 31, 2025"

Rate base is the dollar value of the physical assets and capital a regulated utility uses to deliver its service — things like power plants, pipes, or equipment. Regulators use that value as the starting point to set prices the utility can charge by allowing a specific percentage return on that base, so a larger or higher-valued rate base usually means higher permitted revenues and therefore directly affects investor earnings and the company's ability to raise capital.

AI-generated analysis. Not financial advice.

• Adds approximately 36,000 equivalent residential connections across water and wastewater systems in Nevada and Oregon
• Expands footprint and solidifies Company’s position as the largest regulated water utility in the western United States
• Establishes a scalable regional platform with embedded growth opportunities
• Provides a clear pathway for new capital investments benefiting Oregon and Nevada water and wastewater customers
• Conference call at 8 a.m. PT on February 26
  

SAN JOSE, Calif., Feb. 25, 2026 (GLOBE NEWSWIRE) -- California Water Service Group (NYSE: CWT), a leading publicly traded water utility serving California, Hawaii, New Mexico, Washington, and Texas, announced today that it has reached an agreement to purchase Nexus Water Group’s Nevada and Oregon water and wastewater systems, adding approximately 36,000 equivalent residential connections and a combined rate base of approximately $109 million at December 31, 2025.

“This is a great way to kick off our centennial year,” said Chairman and Chief Executive Officer Martin A. Kropelnicki. “We started out serving four small California communities in 1926, and with this acquisition, we will serve roughly two million people through approximately 584,000 service connections in seven western states. We look forward to completing the transaction and integrating the systems in a way that provides opportunities for employees and excellent service to customers,” he said.

Nexus Water Group President and CEO Rob MacLean said, “Nexus is committed to driving value through our long-term strategy. With this divestment, we are right-sized and strategically positioned for continued growth. We look forward to sharpening our focus where we lead the market and can build on our competitive edge in the industry. We will work closely with California Water Service Group to ensure this transition is seamless for employees and customers.”

According to Kropelnicki, the purchase price of approximately $218 million, which is subject to typical closing adjustments, will be funded with working capital and existing debt and equity facilities. The Company expects to complete the transaction by the end of 2026, subject to customary closing conditions, including approval from applicable public utility commissions, and expects it to be accretive to existing operations within a year of closing.

“I want to thank Nexus Water Group for the opportunity to partner on this transaction as we expand our footprint across the western United States,” Kropelnicki said.

The transaction was unanimously approved by the Boards of Directors of both Company and Nexus Water Group. Baker McKenzie served as the Company’s external legal counsel.

About California Water Service Group

Group is the parent company of regulated utilities California Water Service, Hawaii Water Service, New Mexico Water Service, and Washington Water Service, as well as Texas Water Service, a utility holding company. Together, these companies provide regulated and non-regulated water and wastewater service to more than 2.1 million people in California, Hawaii, New Mexico, Washington, and Texas. Group’s common stock trades on the New York Stock Exchange under the symbol “CWT.” Additional information is available online at www.calwatergroup.com.

This news release contains forward-looking statements within the meaning established by the Private Securities Litigation Reform Act of 1995 (PSLRA). The forward-looking statements are intended to qualify under provisions of the federal securities laws for "safe harbor" treatment established by the PSLRA. Forward-looking statements in this news release are based on currently available information, expectations, estimates, assumptions and projections, and our management's beliefs, assumptions, judgments and expectations about us, the water utility industry and general economic conditions. These statements are not statements of historical fact. When used in our documents, statements that are not historical in nature, including words like will, would, expects, intends, plans, believes, may, could, estimates, assumes, anticipates, projects, progress, predicts, hopes, targets, forecasts, should, seeks or variations of these words or similar expressions are intended to identify forward-looking statements. Examples of forward-looking statements in this news release include, but are not limited to, statements describing the anticipated closing and timing of the Company’s acquisition of Nexus Water Group’s Nevada and Oregon subsidiaries and expected integration of the acquired systems and benefits resulting from the acquisition. Forward-looking statements are not guarantees of future performance. They are based on numerous assumptions that we believe are reasonable, but they are open to a wide range of uncertainties and business risks. Consequently, actual results or outcomes may vary materially from what is contained in a forward-looking statement. Factors that may cause actual results or outcomes to be different than those expected or anticipated include, but are not limited to, the Company’s ability to complete the acquisition of Nexus Water Group’s Nevada and Oregon subsidiaries in line with management’s expectations, the Company’s ability to integrate and operate the acquired operations in an effective and accretive manner and those described under the section entitled “Risk Factors” and elsewhere in our most recent Annual Report on Form 10-K, our subsequent Quarterly Reports on Form 10-Q and our other Securities and Exchange Commission filings. In light of these risks, uncertainties and assumptions, investors are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this news release. We are not under any obligation, and we expressly disclaim any obligation to update or alter any forward-looking statements, whether as a result of new information, future events or otherwise.

CONTACT:	Shannon Dean, (408) 367-8243
	Jim Lynch, (408) 367-8200

FAQ

What did California Water Service Group (CWT) announce on February 25, 2026?

They announced an agreement to buy Nexus Water Group’s Nevada and Oregon systems for approximately $218 million. According to the company, the deal adds ~36,000 equivalent residential connections and a combined $109 million rate base.

How many connections and what rate base does the CWT acquisition add?

The acquisition adds about 36,000 equivalent residential connections and a combined rate base of roughly $109 million as of Dec. 31, 2025. According to the company, those figures reflect the assets being acquired from Nexus Water Group.

What is the purchase price and how will CWT fund the Nexus Water transaction?

The purchase price is approximately $218 million, subject to closing adjustments. According to the company, funding will come from working capital and existing debt and equity facilities.

When does CWT expect the Nexus Water deal to close and what approvals are required?

CWT expects to complete the transaction by the end of 2026, subject to customary closing conditions. According to the company, it requires approval from applicable public utility commissions.

Will the Nexus Water acquisition be accretive to CWT earnings and when?

Yes — the company expects the transaction to be accretive within one year of closing. According to the company, integration and operational synergies support that expectation.

How does the acquisition change CWT’s scale in the western United States?

The deal expands CWT to roughly 584,000 service connections, serving about two million people across seven western states. According to the company, this solidifies its position as the largest regulated water utility in the western U.S.