Saturday, December 10, 2011

Mountain Water Soon to Be Carlyle's

The Carlyle Group's Robert Dove is about to land his first water infrastructure project.  The Montana Public Services Commission issued a draft order recommending approval of Carlyle's purchase of Park Water, which owns Missoula's Mountain Water.

The California Public Utilities Commission gave its approval last week.  Park is based in California and will be acquired by Carlyle's Western Water LLC.

Mountain Water Draft Final Order

Montana's PUC will vote on Tuesday.  The draft order makes reference to numerous stipulations, which can be found below:

Newpsc Doc (3)

From my reading Carlyle can still charge management fees to Mountain, tap the company for dividends and special distributions, and float debt. Carlyle expects 20% annual returns in the public infrastructure arena, down from its normal 30% annual ROI.

Mountain may have doubled in price when The Carlyle Group is ready to monetize its investment. It's nice Carlyle has a ready buyer in Missoula city government. I predict Mountain will be unaffordable by then.