American Water pays $365M for home warranty company

American Water Works Co. Inc. has made a $365 million purchase, it announced recently, acquiring Pivotal Home Solutions from Southern Co.’s Southern Co. Gas subsidiary.

The deal gives the Voorhees-based water and wastewater utility company a home warranty business for appliances, heating and cooling systems, and lines. The company, purchased through the American Water Enterprises subsidiary, complements AWE’s Homeowner Services Group, according to a news release.

“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,” Susan Story, CEO and president of American Water, said in a prepared statement. “Additionally, this is an opportunistic transaction for American Water, as it provides a strong platform for long-term and capital-light organic growth.”

Pivotal Home Solutions operates in 18 states and boasts about 1.2 million customer contracts.

“This acquisition delivers on one of our growth strategies to expand our complementary businesses,” Deborah Degillio, president of American Water Enterprises, said in a statement. “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.”

Pivotal Home Solutions will retain its name and Illinois operations base, American Water said.

The acquisition is expected to close in the second quarter, pending customary approvals and conditions.