Business Combinations

12 Months Ended

Dec. 31, 2021

Business Combination and Asset Acquisition [Abstract]

Kendall West Utility and Bandera East Utility

On December 17, 2021, CLWSC completed its acquisition of Kendall West Utility and Bandera East Utility, companies that provide water services, including wastewater and recycled water services, in Kendall, Bandera and Medina counties which are located in south central Texas. Kendall West Utility and Bandera East Utility, together, add approximately 5,000 people through 1,600 service connections in a service area approximately 19 square miles to CLWSC’s operations. The total net cash price was approximately $23,587. The preliminary purchase price allocation for these acquisitions primarily consisted of acquired utility plant of approximately $9,400 and goodwill of approximately $12,300. The results of Kendall West Utility and Bandera East Utility are included in SJW Group’s consolidated statements of comprehensive income since the acquisition date, including revenues and net loss, and were not material. Pro forma financial information has not been presented because the acquisition was not material to SJW Group’s consolidated financial statements.

CTWS

On October 9, 2019, SJW Group completed the merger with CTWS, a company that provides water service throughout Connecticut and Maine. In addition, CTWS has a real estate company in Connecticut which provides property management services.

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 was approximately $838,476, 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.

The following table summarizes the purchase price and recording of fair values of assets acquired and liabilities assumed as of the acquisition date and subsequent adjustments as of December 31, 2020.


	Amounts Previously Recognized as of Acquisition Date (a)		Measurement Period Adjustments	Amounts Recognized as of Acquisition Date (as Adjusted)
Assets acquired:
Utility plant, net	$	750,703	—	750,703
Nonutility plant	848		—	848
Current assets	42,673		(785)	41,888
Investments	12,489		—	12,489
Regulatory assets and deferred charges, less current portion	83,132		(4,346)	78,786
Other intangible assets	17,181		—	17,181
Other assets	2,592		—	2,592
Goodwill	626,523		(114)	626,409
Total assets acquired	1,536,141		(5,245)	1,530,896
Liabilities assumed:
Long-term debt	281,009		—	281,009
Current liabilities, including maturities of long-term debt	125,772		25	125,797
Deferred income taxes	107,789		(5,411)	102,378
Postretirement benefit plans	31,789		—	31,789
Contributions in aid of construction and construction advances	137,327		—	137,327
Other long-term liabilities	10,607		141	10,748
Total liabilities assumed	694,293		(5,245)	689,048
Assumed equity	$	841,848	—	841,848

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(a)As previously reported in the SJW Group’s 10-K for the period ended December 31, 2019.

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 in connection with the transaction will be deductible for income tax purposes.

The company analyzed and revalued the acquired opening deferred tax asset and liability balances within the measurement period which resulted in a decrease to goodwill of $114. The revaluation of acquired deferred tax assets and liabilities and related uncertain tax positions based upon facts and circumstances that existed as of the acquisition date resulted in adjustments that were recorded to goodwill. In addition, tax related valuation allowances assumed in connection with a business combination were initially estimated as of the acquisition date. Revaluation within the measurement period resulted in release of the valuation allowance as it is more likely than not that the new combined group will be able to utilize the acquired deferred tax assets. There was no impact associated with the measurement period adjustments to the consolidated statement of comprehensive income for the year ended December 31, 2020.