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SJW Group and CTWS Merger (the Merger) | 12 Months Ended
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Dec. 31, 2019
Business Combinations [Abstract] |
SJW Group and CTWS Merger (the “Merger”) | SJW Group and CTWS Merger (the “Merger”) On October 9, 2019, SJW Group completed its previously announced acquisition of CTWS pursuant to the terms of the Second Amended and Restated Agreement and Plan of Merger, dated as of August 5, 2018, by and among SJW Group, Hydro Sub, Inc., a Connecticut corporation and a wholly-owned subsidiary of SJW Group, and CTWS. CTWS provides water service to approximately 137,000 connections that serve a population of approximately 480,000 people in 80 municipalities throughout Connecticut and Maine and more than 3,000 wastewater connections in Southbury, Connecticut. In addition, CTWS has a real estate company in Connecticut which provides property management services. SJW Group has included the financial results of CTWS in the consolidated financial statements from the date of acquisition. SJW Group acquired all of the outstanding stock of CTWS for $70.00 per share in cash (without interest and less any applicable withholding taxes). The total cash purchase price is approximately $838,475, less cash received of $3,011, and approximately $6,384 related to outstanding awards of restricted stock units and deferred share units assumed in connection with the merger with CTWS. SJW Group financed the acquisition with net proceeds from its December 2018 sale of 7,762,000 common equity shares of approximately $411,077, and the October 2019 issuance of $427,398 in new fixed rate term loans. SJW Group raised an additional $18,463 in the debt financing to partially finance transaction costs incurred in connection with the CTWS acquisition. Along with the acquisition debt financing, SJW Group raised $60,000 of new proceeds used to partially refinance certain CTWS short-term borrowings on its existing lines of credit after the CTWS acquisition closed. Management estimated the preliminary fair values of net tangible and intangible assets acquired, and the excess of the consideration transferred over the aggregate of such fair values was recorded as goodwill. The preliminary value of the acquired deferred tax assets and deferred tax liabilities are based on a preliminary analysis, and our estimates and assumptions are subject to change within the measurement period (up to one year from the acquisition date). In addition, management is still gathering information necessary to complete the recognition and measurement of the opening balance sheet. The following table summarizes the estimated preliminary fair value of assets acquired and liabilities assumed as of the date of acquisition:
| Fair Value
Utility plant, net | $ | 750,703 |
Nonutility plant | 848 |
Current assets | 42,673 |
Investments | 12,489 |
Regulatory assets and deferred charges, less current portion | 83,132 |
Other intangible assets | 17,181 |
Other assets | 2,592 |
Goodwill | 626,523 |
Total assets acquired | $ | 1,536,141 |
Long-term debt | 281,009 |
Current liabilities, including maturities of long-term debt | 125,772 |
Deferred income taxes | 107,789 |
Post-retirement benefit plans | 31,789 |
Contributions in aid of construction and construction advances | 137,327 |
Other long-term liabilities | 10,607 |
Total liabilities assumed | 694,293 |
Assumed equity | $ | 841,848 |
Other intangible assets primarily consists of customer relationships. The goodwill balance is primarily attributable to assembled workforce and diversification of markets both from a geographic and regulatory perspective. We do not expect the goodwill recognized to be deductible for income tax purposes. The amounts of revenue and pretax loss of CTWS included in SJW Group’s Consolidated Statements of Comprehensive Income from the acquisition date in October 2019 through December 31, 2019 are as follows:
Total revenues | $ | 21,672 |
Pretax (loss) | (3,174 | )
The following unaudited pro forma financial information summarizes the combined results of operations for SJW Group and CTWS, as though the companies were combined as of January 1, 2018.
| Fiscal Year Ended December 31,
| 2019 |  | 2018
Total revenues | $ | 515,153 |  |  | 514,364 |
Pretax income (loss) | 60,862 |  |  | 72,938 |
Net income (loss) | 56,968 |  |  | 65,449 |
Basic earnings per share | 2.00 |  |  | 2.31 |
The historical consolidated financial information has been adjusted in the pro forma combined financial statements to give effect to pro forma events that are: (1) directly attributable to the transaction, (2) factually supportable and (3) expected to have continuing impact on the combined results of SJW Group and CTWS. As such, the impact of non-recurring transaction related expenses is not included. The pro forma financial statements do not reflect all cost savings (or associated costs to achieve such savings) from operating efficiencies or synergies that could result from the transaction. In addition, the pro forma financial information is for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at January 1, 2018.

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
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