CWT to Buy Nexus Water's Nevada and Oregon Water & Wastewater Systems

California Water Service Group CWT announced that it has agreed to acquire Nexus Water Group’s Nevada and Oregon water and wastewater systems. These will help the company increase its geographical area, expand its operation and strengthen its position, making it one of the largest regulated water utilities in the western United States.

The acquisitions, once completed, will add nearly 36,000 new residential connections. The total purchase price is expected to be around $218 million, which is subject to typical closing adjustments. The company plans to finance the acquisition through its working capital, existing debt and equity facilities. The transaction is expected to close by the end of 2026.

California Water Service has been quite active in expanding its footprint through acquisitions. On Dec.11, 2025, the company received approval from the California Public Utilities Commission for its pending acquisition of Palm Mutual Water Company.

Since the acquisition was announced on Feb.25, 2026, CWT’s shares have lost 3.34%, closing at $45.08 per share on Feb. 27.

Aging Water Infrastructure Needs Investment

U.S. water utilities operate nearly 2.2 million miles of aging pipelines. As a result, wastage of water due to breakouts is a frequent problem faced by both customers and the company. Although the industry is amid digitalization and reuse efforts, nearly 20% of treated water is wasted annually due to leakage. The Environmental Protection Agency estimates that an investment of $1.25 trillion will be required over the next 20 years to maintain existing systems and expand water services.

Big Water Utilities Are Pumping Much-Needed Funds

The U.S. water industry continues to be highly fragmented, with more than 50,000 community water systems and approximately 14,000 wastewater treatment systems. Many smaller utilities lack the financial capacity to modernize aging infrastructure, which contributes to inefficiencies and water loss.

Consolidation through mergers and acquisitions plays an important role in improving service quality, lowering costs and supporting broader infrastructure investment. As a result, larger utilities are increasingly acquiring smaller systems to promote modernization and extend their service footprint.

American Water Works AWK continues to acquire smaller units to expand its operations and plans to invest between $19 billion and $20 billion over the 2026-2030 period to strengthen its operations.

Essential Utilities, Inc. WTRG plans to invest $1.7 billion to strengthen its existing operations. The company is working on its merger with American Water Works, which is expected to close in the first quarter of 2027 and create a utility company worth $40 billion.

Middlesex Water Company MSEX plans to invest $506 million during the 2026-2028 period in infrastructure projects to strengthen its operations. The company has expanded its operations in Delaware and the New Jersey region through strategic acquisitions.

Price Movement of CWT

In one month, the stock of the company has gained 1.4% compared with the industry’s 6.8% growth.

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CWT's Zacks Rank

CWT currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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American Water Works Company, Inc. (AWK): Free Stock Analysis Report

California Water Service Group (CWT): Free Stock Analysis Report

Middlesex Water Company (MSEX): Free Stock Analysis Report

Essential Utilities Inc. (WTRG): Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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