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California Water Service Enters into Agreement to Acquire Casa Loma Water Company and Palm Mutual Water Company

1. Cal Water acquires Casa Loma and Palm Mutual water utility assets. 2. Casa Loma serves about 900 people, Palm Mutual serves 63 customers. 3. Acquisitions aim to enhance service quality and infrastructure upgrades. 4. Regulatory approvals by CPUC are required for completion. 5. Cal Water plans to adopt existing rates for new customers.

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FAQ

Why Bullish?

The acquisitions can boost revenue and market presence. Historical acquisitions often led to stock price increases in similar utilities.

How important is it?

The significance of the acquisitions is likely to attract investor attention and enhance future revenues.

Why Long Term?

Infrastructure upgrades and market expansion will yield benefits over time, enhancing operational efficiency.

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SAN JOSE, Calif., May 29, 2025 (GLOBE NEWSWIRE) -- California Water Service (Cal Water), the largest subsidiary of California Water Service Group (NYSE: CWT), has signed agreements with Casa Loma Water Company (Casa Loma) and Palm Mutual Water Company (Palm Mutual) to acquire both systems’ water utility assets. Casa Loma serves about 900 people through 237 residential and 11 commercial customer connections. The system is located three miles from Cal Water’s Bakersfield Operations Center and is surrounded by Cal Water’s existing service area. Because Cal Water has an existing intertie with Casa Loma, Cal Water will begin delivering water to these new customers after the acquisition is completed. Cal Water intends to install additional interconnections to help improve fire flow and system pressure, and plans to upgrade the infrastructure to Cal Water standards. Palm Mutual is located two miles from Cal Water’s Northeast Bakersfield Treatment Plant and serves 63 residential customers. Cal Water currently serves Palm Mutual through a master meter interconnection, since Palm Mutual does not own nor operate its own sources of supply. Cal Water anticipates upgrading the system’s infrastructure over time to facilitate consistent and high-quality operations. Both acquisitions are subject to satisfactory closing conditions and approval by the California Public Utilities Commission (CPUC). Cal Water intends to file a Tier 2 Advice Letter requesting the adoption of existing Cal Water rates for the new customers. “We applaud Palm Mutual Water Company and Casa Loma Water Company for putting the health and safety of their customers first. We look forward to providing our new customers the high level of service we provide to our other Bakersfield customers,” said Martin A. Kropelnicki, Cal Water Chairman and Chief Executive Officer. About California Water Service California Water Service provides high-quality, reliable water utility services to more than 2.1 million people statewide through 499,400 service connections. Cal Water’s purpose is to enhance the quality of life for customers and communities. To do so, it invests responsibly in water and wastewater infrastructure, sustainability initiatives, and community well-being. The company’s 1,200 employees live by a set of strong core values and share a commitment to protecting the planet, caring for people, and operating with the utmost integrity. The utility has been named one of “America’s Most Responsible Companies” and one of the “World’s Most Trustworthy Companies” by Newsweek, a USA Top Workplace, and a Great Place to Work®. More information is available at www.calwater.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, commits 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 expected benefits resulting from the Casa Loma and Palm Mutual acquisitions, regulatory approvals and filings related to the acquisitions, and Cal Water’s investment plans. Forward-looking statements are not guarantees of future performance. They are based on numerous assumptions that we believe are reasonable but are subject to uncertainty and risks. 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: ability to integrate the business and operate the Casa Loma and Palm Mutual systems in an effective and accretive manner; the outcome and timeliness of regulatory commissions' actions concerning rate relief and other matters, including with respect to the 2024 California GRC filing; changes in regulatory commissions’ policies and procedures; our ability to invest or apply the proceeds from the issuance of common stock in an accretive manner; federal governmental and state regulatory commissions’ decisions; consequences of eminent domain actions relating to our water systems; increased risk of inverse condemnation losses as a result of the impact of weather, climate change, and natural disasters; our ability to renew leases to operate water systems owned by others on beneficial terms; changes in California State Water Resources Control Board water quality standards; changes in environmental compliance and water quality requirements, such as the EPA’s finalization of a National Primary Drinking Water Regulation in 2024; electric power interruptions; housing and customer growth; the impact of opposition to rate increases; our ability to recover costs; availability of water supplies; issues with the implementation, maintenance or security of our information technology systems; civil disturbances or terrorist threats or acts; the adequacy of our efforts to mitigate physical and cyber security risks and threats; the ability of our ERM processes to identify or address risks adequately; labor relations matters as we negotiate with the unions; changes in customer water use patterns and the effects on conservation, including as a result of drought conditions; our ability to complete, in a timely manner or at all, successfully integrate, and achieve anticipated benefits from acquisitions; the impact of weather, climate change, natural disasters, including wildfires and landslides, and actual or threatened public health emergencies on our operations, water quality, water availability, water sales, and operating results and the adequacy of our emergency preparedness; restrictive covenants in or changes to the credit ratings on our current or future debt that could increase our financing costs or affect our ability to borrow, make payments on debt, or pay dividends; risks associated with expanding our business and operations geographically; the impact of stagnating or worsening business and economic conditions, including inflationary pressures, general economic slowdown, or a recession, changes in tariff policy and uncertainty regarding tariffs and other retaliatory trade measures, the interest rate environment, changes in monetary policy, adverse macroeconomic conditions as a result of geopolitical conflicts, and the prospect of a shutdown of the U.S. federal government; the impact of market conditions and volatility on unrealized gains or losses on our non-qualified benefit plan investments and our operating results; the impact of weather and timing of meter reads on our accrued unbilled revenue; the impact of evolving legal and regulatory requirements; the impact of the evolving U.S. political environment that has led to, in some cases, legal challenges and uncertainty around the funding, functioning, and policy priorities of U.S. federal regulatory agencies and the status of current and future regulations; and other risks and unforeseen events described in our most recent Annual Report on Form 10-K and our other SEC 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.

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